Which of the following statements is true?
A) Both extractive and inclusive institutions fail to foster economic activity, productivity growth, and economic activity.
B) Both extractive and inclusive institutions foster economic activity, productivity growth, and economic activity.
C) Extractive economic institutions foster economic activity, productivity growth, and economic prosperity, while inclusive institutions fail to do so.
D) Inclusive economic institutions foster economic activity, productivity growth, and economic prosperity, while extractive institutions fail to do so.

Question

Quizplus · Accepted Answer

The theory of institutional economics suggests that inclusive economic institutions, which create a level playing field, encourage entrepreneurship, investment, and innovation, leading to economic growth and prosperity. On the other hand, extractive institutions, which concentrate power and wealth in the hands of a few elites and exclude the majority from political and economic participation, stifle economic activity and hinder growth. Therefore, statement D is true.

Which of the Following Statements Is True