Without a strong legal systems in a market economy:
A) the incentive to engage in economic activity can be increased substantially.
B) private-sector entrepreneurs can expropriate the profits generated by the efforts of private and public entities.
C) mechanisms for contract enforcement fall to private and corporate lawyers.
D) private and public entities can expropriate the profits generated by the efforts of private-sector entrepreneurs.

Question

Quizplus · Accepted Answer

A well-functioning market economy requires laws protecting private property rights and providing mechanisms for contract enforcement. Without a legal system that protects property rights, and without the machinery to enforce that system, the incentive to engage in economic activity can be reduced substantially. Private and public entities, including organized crime, can expropriate the profits generated by the efforts of private-sector entrepreneurs.

Without a Strong Legal Systems in a Market Economy