Virginia Tech ECON 92237 Quiz 7 1)This section of class has repeatedly emphasized the importance of certain institutions, particularly private property rights, constrained government/ rule of law, and contract enforcement in allowing markets to expand across time and space

Virginia Tech

ECON 92237

Quiz 7

1)This section of class has repeatedly emphasized the importance of certain institutions, particularly private property rights, constrained government/ rule of law, and contract enforcement in allowing markets to expand across time and space. This expansion allows the division of labor and the sort of widespread long-term growth only seen in the last few hundred years. Empirical problems make it difficult to isolate the impact of particular aspects of this institutional framework on economic growth. Acemoglu and Johnson (2005) uses a novel empirical strategy to isolate the role of property rights institutions and contracting institutions on economic growth. What do the authors find?

a.            Both property rights institutions and contracting institutions are necessary for economic growth

b.            Property rights institutions are necessary for economic growth

c.             Contracting institutions are necessary for economic growth

2.            Demsetz’ story of the emergence depends on changing factors which make it profitable to establish property rights. What is the major example he gives of an innovation which led to property rights being established?

a.            Barbed wire b. Fur trade

c. Security cameras