Asked by Michael Petropulos on May 16, 2024
Verified
Under what conditions might government intervention in a market economy improve the economy's performance?
Government Intervention
Actions taken by a government to influence or regulate economic activities, often to correct market failures or achieve social goals.
Market Economy
An economic system where supply and demand from consumers determine the production of goods and services rather than government intervention.
Economy's Performance
An evaluation of how well an economy is doing, commonly measured by indicators such as GDP growth, unemployment rates, and inflation.
- Identify the factors that necessitate governmental involvement in market operations.
Verified Answer
DO
Dominique OglesbyMay 18, 2024
Final Answer :
If there is a market failure, such as an externality or monopoly, government regulation might improve the well-being of society by promoting efficiency. If the distribution of income or wealth is considered to be unfair by society, government intervention might achieve a more equal distribution of economic well-being.
Learning Objectives
- Identify the factors that necessitate governmental involvement in market operations.