Question

List the 6 Institutional structures that promote economic growth- as you do this, pick 3 of them and also explain why they are important (in your own words). The other 3 structures can just be listed.

Answer 1

Six Institutional structures that promotes economic growth.

1).Free Trade; Free trade means that countries can import and export goods without any tariff barriers or other non-tariff barriers to trade. If the there is non-tariff barriers to trade then  countries exports more which result in economic growthof the country.

2).Strong Property Rights; Prosperity and property rights are inextricably linked. The importance of having well-defined and strongly protected property rights is now widely recognized among economists and policymakers. A private property system gives individuals the exclusive right to use their resources as they see fit. That dominion over what is theirs leads property users to take full account of all the benefits and costs of employing those resources in a particular manner. The process of weighing costs and benefits produces what economists call efficient outcomes. That translates into higher standards of living for all. Which overall promotes economic growth of nation.

3).Literacy and Widespread Education; Literacy rate can present solutions to problem of unemployment, poverty, underemployment, unequal distribution of income, etc. Literacy rate is one of the key indicators of the economic situation in a country as increased literacy rate leads to enhancement of a country's human capital.Literacy also provides better employment prospects and gives a higher socio-economic status. Increased literacy rate also leads to decreased population growth rate and thus a country's resources better shared among less people. Thus, Literacy and Widespread Education overall promotes economic growth of country.

4).A Competitive Market System.

5).Efficient Financial Institutions.

6).Copyright And Patents.

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