Government Intervention Flashcards
(7 cards)
1
Q
What are the methods of government intervention?
A
- Taxes
- Subsidies
- Regulation
- Provision
2
Q
What is government failure?
A
When government intervention worsens resource allocation.
3
Q
What are the causes of government failure?
A
- Unintended consequences.
- Excessive costs.
- Poor information.
4
Q
How do taxes affect the market through government intervention
A
Increase costs, reduce production/consumption
5
Q
How do subsidies affect the market through government intervention
A
Lower costs, encourage production/consumption
6
Q
How do regulations affect the market through market intervention
A
Laws to control business behaviour
7
Q
How do provisions affect the market through government intervention
A
Direct government provision of goods/services (e.g. NHS)
