The two broad reasons for a government to intervene in the economy are: to promote efficiency, and to promote equity.

Question

Quizplus · Accepted Answer

This statement is true. Governments may want to intervene in the economy to promote efficiency by addressing market failures, such as externalities and information asymmetry, or to promote equity by addressing income inequality and providing public goods and services.

The Two Broad Reasons for a Government to Intervene in the Economy