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22 October, 06:28

Which of the following is not generally regarded as a legitimate reason for gov't to intervene in a market?

A. To promote efficiency

B. To promote equity

C. To enforce property rights

D. To protect an industry from foreign competition

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Answers (1)
  1. 22 October, 06:55
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    C. To enforce property rights

    Explanation:

    Government intervention in market can be non materistically via regulation, materistically via taxes & subsidy.

    Although the second materislistic way of tax, subsidy comes under the perview of 'Government Budget'.

    Government budget is anual financial statement showing economy's expected revenue & expenditure.

    Economic growth & stability by reallocation of resources, reducing income inequalities - reflect 'efficiency' & 'equity' as valid reasons.

    Foreign protection is also not invalid depending upon the initial budding stage of a developing economy & its global stand. Eg - India 1950 to 1990.

    However all these are progressive legitimate reason for govt. Intervention.

    But, enforcing property rights is a feature of 'socialistic (communistic) economy - which has its own demerits like loss of consumers soveireignity, lack of postive competitive efficiency, govt overburden.
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