A legal system that protects private property and enforces contracts in an even-handed manner helps promote economic growth because it
A) makes it possible for individuals to generate large incomes and get ahead without cooperating with others.
B) provides people with a strong incentive to supply others with things that they value at an economical price.
C) encourages people to use resources now rather than conserving them for the future.
D) keeps the real wages of workers low and thereby makes it possible for business firms to supply goods and services economically.

Question

Quizplus · Accepted Answer

A legal system that protects private property and enforces contracts in an even-handed manner provides people with a sense of security and assurance that the fruits of their labor will not be stolen or taken away arbitrarily. This security encourages people to invest, innovate, and trade, leading to economic growth. Additionally, when people have the freedom to own, use, and transfer property, they are more likely to use those resources efficiently and productively, creating more wealth and value for others. Finally, an even-handed enforcement of contracts ensures that people can make binding agreements and rely on those agreements being fulfilled, which encourages collaboration and exchange, leading to more efficient and effective markets.

A Legal System That Protects Private Property and Enforces Contracts