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What is the explanation of this statement: "While it is possible to argue that democracy is not a necessary pre-condition for a free market economy in which property rights are protected. Subsequent economic growth often leads to the establishment of a democratic regime."

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Chika Ilonah
Chika IlonahLv10
28 Sep 2019

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Related questions

Which choice gives a reason that property rights must be protected in a market economy?

a. right to property is not guaranteed in command economies.
b. in a chaotic market consumers might lose track of whose property belongs to whom.
c. producers must be ensured that they will be able to sell their products and keep their revenues.
d. if buyers have a right to the property of sellers, then they will be more likely to engage in free trade?

Let’s say there is a company that benefits from the protection of state and local governmental agencies. And that company funds its budgets through property taxes. The product that the company creates is one that every person, from 5 to 18 years old, who lives within its service territory, is required to purchase. This protected company can open a facility anywhere it wants. However, competing companies, because they are denied the right to finance their activities through taxation, must ordinarily charge higher prices than the protected company charges. In addition, competing companies must have licenses/permits to

operate, must be audited by state agencies, must follow required standards and must market their products to attract customers. Customers of these competing companies must not only pay for the higher prices but also pay property taxes to fund the protected company.

a. Is the protected company a monopolist? Can you name such a protected company?

b. What should consumers do to minimize, or even to break up, the benefits enjoyed by the protected company?

1. Strong property rights are important for modern economic growth because:

a. They allow governments to extract the gains from private citizen’s investments.

b. People are more likely to invest if they don't fear that others can take their returns on investment without.

c. They ensure an equitable distribution of income.

d. Business cycle fluctuations will be smaller and less likely to disrupt investment patterns.

 

2. A subsistence economy is:

a. A very low-income economy.

b. An economy in which people make what they consume.

c. An economy in which people receive food for pay.

d. All of the above.

 

3. Most economists agree that an effective way of comparing income levels between countries around the world is through the use of:

a. Employment statistics.

b. GDP divided by GNP.

c. Foreign investment.

d. Purchasing power parity.

 

4. Growth depends on which two processes?  

a. Accumulation of assets and making those assets more productive.

b. Harnessing natural resources and marketing them to developed nations at a "fair trade" rate.

c. Exploitation of the agricultural sector in order to advance industrialization.

d. Engaging in free trade while subsidizing domestic agricultural and industrial production.

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