Culture, Trust & the Economy: Checkpoint 1

Quick checkpoint - five questions on trust, culture, social capital, norms and religion.

Question 1 of 5 Why does trust matter for the economy?

It raises taxes It lowers transaction costs and encourages trade, investment and cooperation It prevents all crime It has no economic effect

Kenneth Arrow noted almost every transaction involves trust.

Question 2 of 5 What did Becker and Woessmann find about Protestant regions in Prussia?

They were poorer Their prosperity worked largely through higher literacy They had no schools They banned trade

Luther encouraged people to read the Bible themselves.

Question 3 of 5 What is the strength of weak ties?

Close friends provide the best job information Acquaintances often provide more useful job information because they connect to different networks Weak networks are useless Only family helps find jobs

Mark Granovetter highlighted this in 1973.

Question 4 of 5 What did the Saudi Arabia study find about men's views on women working?

Most men opposed it and knew others did too Most men privately supported it but underestimated how many others agreed Nobody had views on it Women did not want to work

Correcting the misperception led more men to help their wives search for jobs.

Question 5 of 5 What does Islamic finance prohibit?

All banking Charging or paying interest Saving money Buying houses

Islamic banks use profit-sharing, leasing and cost-plus contracts instead.

← Back to The Economics of Festivals Next lesson → Community Networks in Business

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