If institutions in an economy change from being inclusive to extractive,then the ________.
A) returns to entrepreneurship will increase in the economy
B) number of entrepreneurs will decrease in the economy
C) existing entrepreneurs in the economy will earn higher profits
D) opportunity cost of entrepreneurship will decrease in the economy

Question

Quizplus · Accepted Answer

Extractive institutions create barriers to entry and limit opportunities for new entrepreneurs, leading to a decrease in the number of entrepreneurs in the economy. Existing entrepreneurs may still earn higher profits, but the overall environment is less conducive to entrepreneurship. The opportunity cost of entrepreneurship may also increase as more attractive options become available outside of the extractive economy.

If Institutions in an Economy Change from Being Inclusive to Extractive,then