Pearson eText Economics of Money, Banking and Financial Markets, The, Business School Edition -- Instant Access (Pearson+)
Question
Book Icon
Chapter 8, Problem 7Q
To determine

Suppose you have data about two groups of countries, one with efficient legal systems, and the other slow, costly, and inefficient legal systems. Which group of countries would you expect to exhibit higher living standards?

Concept Introduction:

The living standards in a financial system are measured through many factors such as per capita income, gross domestic product, economic growth, political stability, political and religious freedom, etc. However, the most important of these factors is economic growth & stability, that raises the living standards. For the economy to carry efficiently, they must overcome many problems of asymmetric information, adverse selection, and moral hazard which can be taken care of by the regulatory agencies and government’s regulations of collateral and restrictive covenants.

Blurred answer
Knowledge Booster
Background pattern image
Recommended textbooks for you
Text book image
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:9780190931919
Author:NEWNAN
Publisher:Oxford University Press
Text book image
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Text book image
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Text book image
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Text book image
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education