Question

Institutions that promote economic growth include: A) policies that provide incentives for people to produce and...

Institutions that promote economic growth include:

A) policies that provide incentives for people to produce and trade.

B) the extent of government control in markets.

C) income redistribution from the rich to the poor.

D) the amount of goods and services that are provided citizens by their government.

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Answer #1

The role of government is highly restricted in a growing economy because the economy is expected to be competitive in terms of availability and enforcement of property rights, free market economy, free trade of goods and services with minimum transaction costs, etc. For this, there should be sufficient incentive for people to produce and exchange. Government control in the market decreases economic growth. Income redistribution may bring changes in economic and social inequality but it may not foster economic growth.

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