A rationale for government involvement in a market economy is a. markets sometimes fail to produce a fair distribution of economic well-being. b. markets sometimes fail to produce an efficient allocation of resources. c. property rights have to be enforced. d. All of the above are correct.

Question

Giovanna Estes

Business

17 December, 15:18

A rationale for government involvement in a market economy is a. markets sometimes fail to produce a fair distribution of economic well-being. b. markets sometimes fail to produce an efficient allocation of resources. c. property rights have to be enforced. d. All of the above are correct.

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Answers (1)

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Noe Mccullough · Answer 1

d. All of the above are correct.

Explanation:

One way of government involvement in a market economy is through Central planning; this way, the government guides economic activity. This can occur to correct a "market failure" which by definition, is inability of a market to allocate resources efficiently. Other reasons for government involvement are; to improve economic performance and to achieve a more equitable distribution of income and wealth.