Government's Role in the Economy Crash Course Government

The government helps promote a market economy through all of the following EXCEPT which one?

• Providing public goods

• Governing rules of exchange

• Discouraging competition

• Defining rules of property

How does the government define rules of property?

• By creating monetary policy

• By eliminating competition

• By establishing ownership through payment or inheritance

• By providing public goods

What is the government's role in governing rules of exchange?

• To regulate the buying and selling of certain goods

• To provide public transportation

• To create a labor force

• To ameliorate negative externalities

Why does the government set market standards?

• To issue income tax refunds

• To promote uncertainty

• To eliminate the need for taxes

• To ensure fair and consistent measurements

What are public goods?

• Goods and services provided by the government for everyone to enjoy

• Goods and services provided by private companies

• Goods and services that can be denied to a particular subset of the population

• Goods and services that are highly profitable

How does the government help create a labor force?

• Through required immunizations for school

• By collecting taxes

• Through compulsory education laws and training programs

• By ameliorating negative externalities

What are negative externalities?

• External effects of market transactions that impose costs on society

• External effects of market transactions that benefit society

• External effects of government regulations

• External effects of monopolies

How does the government promote competition?

• By allowing businesses to do whatever they want

• By providing public goods

• By creating laws to regulate/prevent monopolies

• By ameliorating negative externalities

What are the two market forces that some believe will regulate the economy without government's involvement?

• Time and Gravity

• Substitutes and Complements

• Supply and Demand

• Monetary & Fiscal Policies

One of government's key roles in regulating the market economy is to provide ___ to ensure predictability in that what you have will not be stolen as well as to secure property rights.

• regulations and taxes

• law and order

• monopolies and oligopolies

• subsidies and refunds