Another Multiple Choice
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Another Multiple ChoiceWhich one of the following is the best definition of government failure?
A) Government Intervention which leads to a loss of economic welfare.
B) Government failing to allocate resources efficiently.
C) Government failing to intervene with the market.
D) Government intervention which fails to have a positive effect on the economy.
I thought the answer was B, but my teacher said it was A. Can someone explain please?
My exam board is edexcel also, so I need an explanation worth 3 marks, not just the correct answer.
Thanks,
Sora -
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Re: Another Multiple ChoiceA) The government has made things worse. Its actions have caused a loss of welfare.(Original post by Sora)
Which one of the following is the best definition of government failure?
A) Government Intervention which leads to a loss of economic welfare.
B) Government failing to allocate resources efficiently.
C) Government failing to intervene with the market.
D) Government intervention which fails to have a positive effect on the economy.
I thought the answer was B, but my teacher said it was A. Can someone explain please?
My exam board is edexcel also, so I need an explanation worth 3 marks, not just the correct answer.
Thanks,
Sora
B) The situation could have been improved by government, but still be suboptimal. The government may have improved welfare compared to a free market, but welfare is still not maximized.Last edited by Classical Liberal; 16-04-2012 at 15:59.
