If the legal and regulatory environment fails to protect property rights and is often used to favor some at the expense of others, which of the following is most likely to be encouraged?
A) Productive activities.
B) A high rate of investment.
C) Rent-seeking and unproductive activities.
D) Competitive markets.

Question

Quizplus · Accepted Answer

When the legal and regulatory environment fails to protect property rights, individuals and businesses are more likely to engage in rent-seeking and unproductive activities rather than productive activities. These unproductive activities may include seeking special favors or privileges from the government rather than creating value through innovation and entrepreneurship. Additionally, there may be less incentive for investors to invest in such an environment where property rights are not protected. Therefore, the most likely outcome is an increase in rent-seeking and unproductive activities.

If the Legal and Regulatory Environment Fails to Protect Property