Question

An institution is a significant practice, relationship, or organization in a society. Institutions shape the environment in which decisions are made, and they affect production and income in a nation. The most significant institutions are private property rights, political stability and the rule of law, open and competitive markets, efficient taxes, and stable money and stable prices. Complete each of the following sentences with the correct institution. a. The single greatest incentive for voluntary production is the existence of . b. increase investment in physical and human cap

Answer 1

- Private property rights:

- Institutions and incentives

Step-by-step explanation:

- Private property rights → they are constructs that determine how a resource or economic good is used and owned. They can be view as an attribute of an economic good, it has four components and also, it is often referred to as a bundle of rights:

1- The right to use the good.

2- The right to be able to aer income from that good

3- The right to transfer the good to other, or to abandon it or destroy it.

4- The right to enforce the property rights.

- Institutions and incentives → This kind of institution creates incentives for technological innovation and investments in both human and physical capital . When the right incentives are placed, as a consequence production and investment occur naturally, as a result we have more human capital, more physical capital, and technological advancement - all of which lead to economic growth.