BUSINESS ADMINISTRATION
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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products have become very technical.
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people’s attitudes have changed.
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costs of production have continued to increase.
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competition in the marketplace has increased.
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Detailed explanation-1: -One of the reasons that has caused government’s role in business to expand is that: products have become very technical. people’s attitudes have changed. costs of production have continued to increase.
Detailed explanation-2: -The government (1) provides the legal and social framework within which the economy operates, (2) maintains competition in the marketplace, (3) provides public goods and services, (4) redistributes income, (5) cor-rects for externalities, and (6) takes certain actions to stabilize the economy.
Detailed explanation-3: -One role of government is to correct problems of market failure associated with public goods, external costs and benefits, and imperfect competition. Government intervention to correct market failure always has the potential to move markets closer to efficient solutions, and thus reduce deadweight losses.
Detailed explanation-4: -The main functions of government, as given by Adam Smith, are to maintain law and order in a country, make national defense stronger, and regulate money supply. According to Smith, the market system administers various economic functions.
Detailed explanation-5: -Sports betting, investing in stocks, and buying junk bonds are some examples of activities that involve speculative risk.