INTRO

Question 1

Examples of Government-Provided Services

Answer 1

National Defence – Protects society from external threats (a public good)

Education – Builds human capital and equal opportunity

Healthcare – Promotes public health and reduces long-term costs

Infrastructure – Roads, bridges, ports: essential for movement of people and goods

Utilities – Water, electricity, sanitation (especially in natural monopolies)

Question 2

What does the government do for society?

Answer 2

Criminal justice system :

      - Enforces the rule of law

      - Disincentivizes harmful behavior

      - Protects property rights

Question 3

What does the government do for business?

Answer 3

Provide a stable trading environment for businesses?

Rule of law: Ensures enforcement of contracts

Macroeconomic policy:

    - Sets interest rates

   - Makes government spending decisions to 
     stabilize the economy

Question 4

Regulations

Answer 4

The government creates rules backed by law to guide and protect both society and the economy.

Question 5

List key areas where the government uses regulation.

Answer 5

Labour Law – Protects workers and provides benefits (e.g., minimum wage)

Environmental Regulations – Reduces pollution and protects natural resources

Financial Regulation – Prevents fraud and protects investors

Competition Law – Promotes fair competition and prevents monopolies or unfair trading practices

Question 6

What are the purposes of taxes?

Answer 6

Fund government policies and services

Discourage harmful behavior (e.g., “sin” taxes on alcohol, tobacco, pollution)

Question 7

What is a subsidies?

Answer 7

A subsidy is money or support that the government gives to individuals or businesses to encourage certain activities or lower the cost of doing them.

Question 8

What is the purpose of subsidies?

Answer 8

Governments use subsidies to:

Promote good behavior (e.g., investing in clean energy, hiring workers, doing research)

Make essential goods or services more affordable (e.g., food, healthcare, education)

Support industries important for national interest or stability (e.g., farming, tech)

Question 9

What are some ways the government redistributes wealth and supports the underprivileged?

Answer 9

Progressive tax system – Higher earners pay a larger share of income

Welfare programs – Provide support like unemployment benefits, disability aid, housing, etc.