Question

Each of the following statements describes how the political and legal environment encourages productivity EXCEPT: A. Well-defined property rights encourage production and saving.
B. Political stability promotes economic growth.
C. Price changes in markets provide suppliers incentives to supply goods to markets.
D. Pay rates determined by a governmental planning agency provide workers with the incentive to work hard.

Answer 1

Answer:

C. Price changes in markets provide suppliers incentives to supply goods to markets.

Explanation:

Price changes in the market has two perspective,

• increase in price, will increase the productivity for retailers,
• decrease in price, will decrease the productivity for retailers.

With increase the retailers expect to earn more, and with decrease the retailers expect to earn less.

This is a normal market condition and scenario, this does not link to any kind of political or legal environment, although the change in price might be due to political or legal policies, but the increase or decrease in productivity, is not related to any political or legal influence.