b) Evaluate the view that government intervention can correct all market failures caused by the effects of economic activity on the environment? (30 marks)
Please help, any ideas would be welcome!
i think for question two,, just give examples of market failure e.g negative externality, imperfect information
How government attempt to correct market failure.. e.g they use taxation or subsidies... you can say that government may not always correct market failure because they dnt know exactly how much tax to put on or subsidies to give.........government intervention to correct market failure could lead to government failure...coz if they put on too much tax it would lead to a disaster coz nobody would produce anything ( Fall in economic activitiy) sorry ma answer is not perfect but its smething like this..... just by mentioning those points, you will atleast get 10 marks n then to discuss them even more
Economic activity can fall or increase , it increases because of increase in demand for goods or an increase in expenditure etc vice versa. If the economy is operating at near potential ouput then according to keynsians an increase in economic activity could lead to inflation