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This question was created from Quiz_ Homework #3 (Model of Production & Solow Growth Model) (1).pdf


Last choice: The term "commenda" refers to the use of a common language, which was crucial in overcoming cultural and linguistic barriers to trade in the Mediterranean around the 14th century.


One example of an inciusive institution discussed by Acemoglu and Robinson in their
book 'Why Nations Fall“ {and in a large number of other publications} is the so-
called commenda contract in Mediaval Venice (and other parts of the Mediterranean}.
These contracts are discussed in some additional detail in the two references in the Canvas module covering chapter 4 of the textbook. Acemoglu and Robinson claim that this type of contract offered emerging traders a
pathway to commercial success and wealth. What feature best captures the "inclusiveness" of this type of contract? The contracts were written on cheap paper rather than expensive parchment. which lowered the
entry costs substantially. “H“- The contract offered novice traders a line of credit to finance new commercial ventures.
T- The commenda contract enabled up-and-comlng traders to acquire equity stakes in risky, but potentially lucrative commercial voyages without requiring them to supply capital in the same
proportion as their profit share.

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The correct option is: c) The commenda contract enabled up-and-coming traders to acquire equity stakes in risky, but... View the full answer

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