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

Question

Quizplus · Accepted Answer

A system of property rights encourages economic growth by creating incentives to invest in capital and be innovative. When individuals or firms have property rights over the goods and services they produce, they can be assured they will reap the benefits of their investments, which gives them the incentive to invest in new and better ways of producing goods and services. This, in turn, leads to increased economic growth over time.

A System of Property Rights