Discuss private-sector risks and the role government intervention has in improving economic efficiency
Please provide the best answer for the statement.
Private-sector risks protected by the government include ensuring only mutually agreeable transactions take place, outlawing price manipulation, and protecting property and human rights. The government ensures only voluntary transactions take place in the economy by making blackmail, extortion, and other forms of private coercion illegal. This moves the economy toward an efficient outcome by ensuring only those who value the good the highest purchase the product, and only those with the lowest willingness to sell produce it. The government also outlaws price manipulation by placing limitations on trade, price fixing, and refusal to honor a contract. Property and human rights are also protected by the government; laws are enforced to protect individuals and firms from theft, deception, and discrimination. The protections offered by the government reduce the risk of doing business and encourage investment, new businesses, and innovation.
You might also like to view...
If there is an advancement in the technology used to produce a product, what is the likely effect it may have on the supply?
A) The company would not change its manufacturing. B) It would increase the supply. C) It would decrease the supply. D) More people would be needed to produce the product.
________ analysis by economists refers to the attempt to answer questions such as what are the effects of a tax on production and consumption decisions
A) Positive B) Negative C) Normative D) Investigative
During the Great Recession, the Polish economy withstood the economic impact by:
A) decreasing the money supply. B) increasing the taxes. C) increasing the money supply. D) appreciating its currency.
According to adaptive expectations theory, expansionary monetary and fiscal policies to reduce the unemployment rate are:
A. useless in the long run. B. useless in the short run. C. ineffective on the price level. D. successful at achieving the desired outcomes.