Answer:
a. Private Property Rights
b. Political Stability and Rule of Law
c. Open and Competitive Market
d. Private Property Rights
Explanation:
a. By defining private property Rights and giving people a chance to own resources, Individuals will strive to own more and more of such rights and so will produce as much as they can so as to afford such rights.
b. When a nation is Politically stable and respects the Rule of Law, investment payoffs are easier to predict than in a country where instability can threaten to degrade investments such that the payoffs will be lost. For example, think of all the Western firms that lost money when the Shah of Iran was overthrown by the Ayatollah.
c. Specialization is more likely to occur in nations with Open and Competitive Market. An Open Market means that goods can come in from the outside easily. This will have the effect of the country being able to import goods that cost a lot to produce locally and instead focus on producing those goods that they are well adept at producing. This is Specialization. Also as a result of competition, companies will strive to find better ways to make profit above competitors and come up with more efficient ways of Production as a result.
d. The Xiaogang Agreement refers to an agreement by farmers in Xiaogang to subdivide their lands in secret so that they would each own a small part of it. As a result, the farmers had an incentive to produce for themselves as they now owned resources that they could benefit from. This right to Private Property led to a huge boom in Agriculture.
