The government should intervene to encourage growth if the market
A)is providing the right incentives, and there is no risk of government failure.
B)is not providing the right incentives, and there is little risk of government failure.
C)is not providing the right incentives, and there is a risk of government failure.
D)is providing the right incentives, and there is risk of government failure.
E)is not providing the right incentives regardless of the risk of government failure.

Question

Quizplus · Accepted Answer

If the market is not providing the right incentives, such as monopolistic behavior or inadequate investments in public goods, the government should intervene to encourage growth. However, if there is a risk of government failure, such as corruption or inefficient regulations, the government intervention could be counterproductive. Therefore, the best option is B, which implies that the government can intervene to correct market failures as long as the risk of government failure is minimal.

The Government Should Intervene to Encourage Growth If the Market