________ distorts economic activity and can substantially reduce GDP.

Question

Quizplus · Accepted Answer

Corruption can lead to economic inefficiency, misallocation of resources, and reduced productivity, which can ultimately decrease GDP. It creates a climate of mistrust in the government, institutions, and businesses, making it difficult for investors to make decisions and reduces foreign investment flows. The diversion of public funds for private gain means less money is available for public investments in education, health, infrastructure, and other social welfare programs, which can impede growth and development.

________ Distorts Economic Activity and Can Substantially Reduce GDP