When a nation's institutional environment is more favorable, it will
A) attract more physical investment.
B) encourage individuals to invest more heavily in human capital.
C) encourage the development and efficient use of natural resources.
D) all of the above.

Question

Quizplus · Accepted Answer

A favorable institutional environment leads to increased confidence and stability for investors, making physical investment more attractive. Additionally, institutions that protect property rights and encourage transparency and competition encourage individuals to invest in their own education and training, leading to increased investment in human capital. Finally, efficient institutions can promote the sustainable management of natural resources, ensuring their continued use for future generations.

When a Nation's Institutional Environment Is More Favorable, It Will