Which of the following is a characteristic of an institution?
A) Institutions are determined by individual opinions without considering the government's preferences.
B) Institutions place constraints on the behavior of economic agents.
C) Institutions have very little influence on a nation's economic prosperity.
D) The institutions of a nation are permanent and cannot be changed over time.

Question

Quizplus · Accepted Answer

An institution is a set of established rules and constraints that shape and influence the behavior of economic agents. Therefore, one of the key characteristics of an institution is that it places constraints on behavior. The other options are incorrect: A is false because institutions are often determined by the government or some other authority, rather than individual opinions; C is false because institutions can have a significant impact on economic prosperity; and D is false because institutions can evolve and change over time.

Which of the Following Is a Characteristic of an Institution