The main reason why the government enforces contracts and maintains a legal system that punishes those who violate contracts is
A) to facilitate exchange.
B) to decrease imperfect competition.
C) to decrease imperfect information.
D) to increase uncertainty.

Question

Quizplus · Accepted Answer

The main reason why the government enforces contracts and maintains a legal system that punishes those who violate contracts is to facilitate exchange. By enforcing contracts, individuals and businesses are more likely to participate in the exchange of goods and services, which benefits the overall economy. If contracts were not enforced, people may be less willing to engage in exchange, which would decrease economic activity.

The Main Reason Why the Government Enforces Contracts and Maintains