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Author Question: What are the two ways in which extractive institutions affect the number of entrepreneurs in a ... (Read 34 times)

Caiter2013

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on: Jun 30, 2018
What are the two ways in which extractive institutions affect the number of entrepreneurs in a nation?
 
  What will be an ideal response?

Question 2

Which of the following is NOT included in M1 or M2?
 
  A) credit card balances
  B) checking account balances
  C) currency in circulation outside of commercial banks
  D) traveler's checks
Macroeconomics ¦ Acemoglu, Laibson, List ¦ 3rd Edition
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macmac

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Reply #1 on: Jun 30, 2018
Answer to Question 1

The presence of extractive institutions reduces the number of entrepreneurs in a nation in two ways:
a) They create insecure property rights and fail to provide proper legal back up to businesses, and reduce profitability.
b) They create entry barriers discouraging entrepreneurs from starting companies that would compete and innovate in the market.

Answer to Question 2

A


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