In a market system, well-defined property rights are important because they:
A)increase unnecessary investment.
B)limit destructive economic growth.
C)create economic problems.
D)encourage economic activity.

Question

Quizplus · Accepted Answer

Well-defined property rights encourage economic activity by providing individuals and businesses with the confidence to invest, innovate, and engage in trade knowing that they will benefit from the fruits of their labor. This helps to promote economic growth and development. Limiting destructive economic growth and avoiding economic problems are also potential benefits of well-defined property rights, but they are not the primary reasons why they are important. Increasing unnecessary investment is not a benefit of property rights.

In a Market System, Well-Defined Property Rights Are Important Because