A system of property rights
A) reduces the efficiency of government, which reduces the growth rate of the economy over time.
B) encourages investment but discourages entrepreneurial activity, so the effect on economic growth is uncertain.
C) encourages economic growth by creating incentives to invest in capital and to be innovative.
D) discourages economic growth by discouraging the development of new ideas and ways of doing things.

Question

Quizplus · Accepted Answer

A system of property rights creates incentives for investment in capital and innovation, which leads to economic growth. As individuals have secure property rights, they are more likely to invest in capital and new ideas. This sets a path for sustainable economic growth over time.

A System of Property Rights