ECONOMICS
ECONOMIC SYSTEMS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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they have limited control of the aspects of the economy
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they have no control of any aspects of the economy
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they are forced to keep out of economic affairs
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both B and C
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Detailed explanation-1: -The government sets the rules and regulations that underpin the economy. It sets the interest rates and levels of taxes and expenditures that regulate the macroeconomy. It provides the infrastructure, the education, the basic research on which the economy relies.
Detailed explanation-2: -Economists, however, identify six major functions of governments in market economies. Governments provide the legal and social framework, maintain competition, provide public goods and services, redistribute income, correct for externalities, and stabilize the economy.
Detailed explanation-3: -In a command economy, the government (or some other central authority) controls and steers major aspects of economic production. The government decides the means of production and owns the industries that produce goods and services for the public.
Detailed explanation-4: -Governments can create subsidies, taxing the public and giving the money to an industry, or tariffs, adding taxes to foreign products to lift prices and make domestic products more appealing. Higher taxes, fees, and greater regulations can stymie businesses or entire industries.
Detailed explanation-5: -The government’s trade policy can affect a business by making it easier or more difficult to trade across international borders. Trade policy can include the imposition of import tariffs, quotas on imports and exports of certain goods, and subsidies for local producers to support them against international competition.