Consider two countries: Country A and Country B.Both countries are identical in all aspects except one.There are well-defined property rights in Country A,while there are no property rights in Country B.Given this information,which of the following statements is likely to be true?
A) Country A is likely to grow faster than Country B.
B) Country B is likely to grow faster than Country A.
C) Both countries are likely to grow at the same rate.
D) Neither of the countries is likely to experience any growth in GDP.

Question

Quizplus · Accepted Answer

Well-defined property rights provide individuals and businesses with the incentives to invest, innovate, and create wealth. Property rights also enable the efficient allocation of resources through markets, which in turn promotes productivity and economic growth. Therefore, Country A is likely to grow faster than Country B, where property rights are non-existent, and economic activity is likely to be hindered by the absence of incentives and the misallocation of resources.

Consider Two Countries: Country a and Country B