The problems encountered by transitional economies trying to become well-functioning market economies involve:
A) eliminating bank checking accounts in favor of paper currency.
B) taking steps to raise the inflation rate.
C) expanding private property rights.
D) eliminating all welfare programs and social safety nets.

Question

Quizplus · Accepted Answer

Transitional economies often lack well-defined private property rights, which can deter investment and hinder economic growth. Expanding private property rights can help create a more secure environment for investment and economic activity. The other choices (A, B, D) are unlikely to facilitate the transition to a well-functioning market economy. Eliminating bank checking accounts may create problems with record-keeping and money laundering, raising the inflation rate can lead to economic instability, and eliminating welfare programs can have negative impacts on social stability and equity.

The Problems Encountered by Transitional Economies Trying to Become Well-Functioning