The government enacts regulation to institute enforceable property rights for business investment. Which input in the production function changes, and what is the effect on economic growth in the country?

Question

Quizplus · Accepted Answer

By enacting regulation to establish effective property rights, the capital stock increases, which in turn leads to an increase in productivity and economic growth. Effective property rights reduce the risk and uncertainty for investors, which encourages more investment and contributes to the growth of the economy.

The Government Enacts Regulation to Institute Enforceable Property Rights for Business