An example of an institution that will increase the expected payoff of investment is
A) a more efficient tax structure.
B) political instability.
C) trade restrictions to protect domestic jobs.
D) high rates of inflation.
E) corruption.

Question

Quizplus · Accepted Answer

A more efficient tax structure can increase the expected payoff of an investment by reducing the amount of taxes that need to be paid, thereby increasing the net return on the investment. Political instability, trade restrictions, high rates of inflation, and corruption can all lower the expected payoff of an investment by increasing uncertainty and reducing the stability of the economy.

An Example of an Institution That Will Increase the Expected