Consider two countries, A and B. Assume that both countries have identical physical endowments of iron ore. In country A, any profits made from mining the iron ore are subject to confiscation by the government. While in country B, there is no such risk.How does the risk of expropriation affect the economic success of the two nations? Which nation would you think would be richer? Why? Use vocabulary learned in our textbook chapters to explain.Given your answer to the above, why is there widespread political support for government policies that expropriate resources from some groups for the sole purpose of handing them out to other groups?Consider this: How do uncontrolled ransomware attacks destabilize the rule of law?

In the instance at hand, Country A has a regime-driven economy, in which the government limits the…

Answered: Consider two countries, A and B.…

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter33: International Trade

Section: Chapter Questions

Problem 8QP

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Consider two countries, A and B. Assume that both countries have identical physical endowments of iron ore. In country A, any profits made from mining the iron ore are subject to confiscation by the government. While in country B, there is no such risk.

How does the risk of expropriation affect the economic success of the two nations?
Which nation would you think would be richer? Why? Use vocabulary learned in our textbook chapters to explain.
Given your answer to the above, why is there widespread political support for government policies that expropriate resources from some groups for the sole purpose of handing them out to other groups?

Consider this: How do uncontrolled ransomware attacks destabilize the rule of law?

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