Question

according to the world justice project, venezuela does one of the worst jobs as a country enforcing the rule of law. the consequence of a weak rule of law is

• ○ a. strong property rights enforcement leading to greater investment.

○ b. a decrease in cash transactions and increased efficiency.
○ c. more risk taking on the part of entrepreneurs and greater economic investment.
○ d. difficulty in attracting investment and low economic growth.

Explanation:

A weak rule of law means there is less security for investments. Property rights may not be well - protected (so A is wrong). Cash transactions may increase as there is less trust in formal systems (so B is wrong). Entrepreneurs are less likely to take risks as there is no legal protection (so C is wrong). Without a proper legal framework, it is hard to attract investment (as investors want security) and this leads to low economic growth.

Answer:

D. difficulty in attracting investment and low economic growth.