Why might governments choose to dispense with the market mechanism for directing development? What problems will arise?
What will be an ideal response?
Concerns about markets include instability, uncertainty, and exploitation of the poor will arise. Without markets, however, resource allocation has no objective basis and governments acquire considerable power, which may lead to other kinds of exploitation.
You might also like to view...
Which of the following is the least tangible?
a. Social capital b. Physical capital c. Human capital d. All of these choices
The Malthusian theory
A) shows that the production function will shift upward continuously. B) predicts that the real GDP per person will continue to increase as long as technology increases. C) is also called the classical growth theory and predicts that we will run out of resources. D) claims that the subsistence wage will increase over time. E) is also called the neoclassical growth theory.
The equation of exchange is a(n)
a. identity relating the volume of transactions at current prices to the stock of money times the turnover rate of each dollar. b. "truism" and by itself does not explain the variables it contains. c. identity relating the volume of transactions at base year prices to the stock of money times the turnover rate of each dollar. d. Both a and b e. Both b and c
Private goods are those goods
A) that violate the principle of rival consumption. B) for which no public market exists. C) that can only be consumed by one individual at a time. D) to which the non-exclusion principle applies.