Chapter 13 Why Do Economies Grow?

| November 9, 2018

5)
Recall the application. Clear property rights are important for economic
growth, because without a clear title to property,
A)
the property can not be used as collateral for loans.
B)
people will not reside on the property.
C)
no utilities will be available for the property.
D)
the property has no value.

6)
Recall the application. In Peru, producing palm oil is very profitable but is a
time consuming process. Producing coca paste, an ingredient in cocaine, is not
as costly or as time consuming as the production of palm oil. To switch
Peruvian farmers from producing an ingredient used for cocaine to producing the
profitable and safe palm oil would require
A)
informal ownership of property.
B)
cocaine being declared illegal in Peru.
C)
improvements in finance and the ability to borrow funds.
D)
governmental approval.

7)
The absence of clear property rights inhibits investment and economic growth.

8)
The substantial increase in clear property rights has severely impeded growth
in many developing countries.

9)
Explain the connection between property rights and economic growth.

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