What are the five major reasons for government involvement in a market economy?
What will be an ideal response?
Provide the legal, monetary and social framework necessary for markets to operate. Insure that markets operate in a competitive manner. Redistribute income and wealth in a more desired (equitable) fashion. Guarantee a more efficient use of resources when there are benefit and cost externalities. Stabilize the overall level of economic activity to counteract undesirable levels of price inflation and unemployment.
You might also like to view...
Which of the following events would increase the supply of tomatoes?
a. an increase in the demand for tomatoes b. an increase in the wages of people harvesting tomatoes c. a decrease in the cost of fertilizer for tomato plants d. an increase in the price of tomatoes e. a decrease in the price of tomatoes
This graph shows three different budget constraints: A, B, and C.
If we compare budget constraint A to budget constraint B in the graph shown, what can be said of the relative prices reflected in the two?
A. Because B is steeper, soda is relatively less expensive in A than in budget constraint B. B. Because B is flatter, soda is relatively more expensive in A than in budget constraint B. C. Because A is flatter, soda is relatively more expensive in A than in budget constraint B. D. Because A is steeper, soda is relatively less expensive in A than in budget constraint B.