Government intervention

Question 1

What is government intervention in economics?

Answer 1

Government intervention refers to the actions taken by a government to influence its economy, often through regulation, taxation, or subsidies.

Question 2

True or False: Government intervention can lead to market failure.

Answer 2

False: Government intervention is often intended to correct market failures.

Question 3

Fill in the blank: One common form of government intervention is __________, which is financial support given to businesses or industries.

Answer 3

subsidies

Question 4

What is the purpose of implementing price controls?

Answer 4

The purpose of implementing price controls is to stabilize prices and protect consumers from extreme fluctuations.

Question 5

Multiple Choice: Which of the following is NOT a reason for government intervention? A) Correcting market failures B) Redistributing income C) Reducing competition D) Stabilizing the economy

Answer 5

C) Reducing competition

Question 6

What are tariffs?

Answer 6

Tariffs are taxes imposed on imported goods to protect domestic industries and generate revenue for the government.

Question 7

True or False: Government intervention always results in positive outcomes for the economy.

Answer 7

False: Government intervention can sometimes lead to inefficiencies and unintended consequences.

Question 8

What is the role of regulations in government intervention?

Answer 8

Regulations are rules set by the government to control the behavior of firms and protect consumers and the environment.

Question 9

Fill in the blank: A __________ is a government-imposed limit on the quantity of a good that can be imported.

Answer 9

quota

Question 10

What is the impact of government intervention on supply and demand?

Answer 10

Government intervention can disrupt the natural balance of supply and demand, leading to surpluses or shortages in the market.