Which of the following is a characteristic of the 'New Institutional Economics' approach?
A. It focuses only on technological change
B. It assumes zero transaction costs always
C. It emphasises the role of institutions, property rights and transaction costs in economic performance
D. It ignores institutions completely
Answer: Option C
Solution (By JKSSB Mock Tests)
New Institutional Economics, associated with Coase, North and Williamson, analyses how institutions, property-rights structures and transaction costs shape economic behaviour and long-run performance.
Explanation:
Financial inclusion seeks to ensure that individuals and businesses, especially the underserved, have access to useful and affordable financial products and services.
Explanation:
Under increasing returns to scale, long-run average cost falls as output expands, resulting in a downward-sloping LAC curve over the relevant range.
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