According to the textbook, what are the two key political functions of government in a market economy?
What will be an ideal response?
The two functions of government that are political rather than economic include (1 ) the regulation and provision of government-sponsored and government-inhibited goods, and (2 ) income redistribution.
You might also like to view...
Why may equity finance be preferred to debt finance for developing countries?
A) A fall in domestic income automatically reduces the earnings of foreign shareholders without violating any loan agreement. B) There are laws insuring against any default with equity finance. C) The risk is shared between debtor and creditor with debt finance. D) The tax structure leaves equity finance unconstrained. E) Repayments are unaffected by falls in real income.
When the minimum wage is set above the equilibrium market wage,
a. there will be a shortage of labor at the minimum wage b. it will have no effect on the quantity of labor employed c. the unemployment rate will rise d. the quality of the labor force will increase e. the unemployment rate will fall