Question

To foster innovation in the business environment, it is important that strong legal protection of property rights is in place. Inadequately enforced property rights can lead to an increase in the______.

Answer 1

Answer:

risk of expropriation of profits.

Explanation:

Property rights are important to make owners safe and secure, without legal protection their right can be violated. The risk of expropriation of profits is higher in the absence of legal protection. Without rights, government and other private owners can easily violate the rights by copying the products, and the government can take over the firm or land with small compensations with affect profits.