Why do political instability and insecure property rights retard economic growth?
A) Fear that private property will be confiscated substantially reduces the incentive to invest and create wealth.
B) When property rights are insecure, foreign investors will be reluctant to invest in the country.
C) Savings will tend to flow out of a country if individuals fear their property is insecure.
D) All of the above are correct.

Question

Quizplus · Accepted Answer

All of the choices are correct. Political instability and insecure property rights create uncertainty and risk for investors, both domestic and foreign. This reduces incentives to invest and create wealth, and savings may flow out of a country if individuals fear their property is not secure. Additionally, foreign investors will be reluctant to invest in a country with insecure property rights, further limiting economic growth.

Why Do Political Instability and Insecure Property Rights Retard Economic