The dictator of Turan has recently begun to arbitrarily seize farms belonging to his political opponents, and he has given the farms to his friends. His friends don't know much about farming. The courts in Turan have ruled that the seizures are illegal, but the dictator has ignored the rulings. Other things equal, what would we expect to happen to the growth rate in Turan?
A)It will fall temporarily, but will return to where it was when the new owners learn how to farm.
B)It will increase because the total amount of human capital in the country will increase as the new owners learn how to farm.
C)It will fall and remain lower for a long time.
D)It will not be affected unless widespread civil disorder or civil war results.

Question

Quizplus · Accepted Answer

By arbitrarily seizing farms and giving them to inexperienced friends, the dictator is disrupting the agricultural sector of Turan. The new owners are likely to mismanage the farms, which would reduce output and productivity. Additionally, the political instability caused by the dictator's actions could deter foreign investment and result in a brain drain of talented workers, leading to a long-term decline in the growth rate.

The Dictator of Turan Has Recently Begun to Arbitrarily Seize