In View of the Possible Need for Government Action in Markets

question 129

Multiple Choice

In view of the possible need for government action in markets where asymmetric information is a problem, which of the following is a valid concern?

• A)The government rarely has more information than the private parties.
• B)Private markets can sometimes deal with information asymmetries on their own.
• C)The government is itself an imperfect institution.
• D)All of the above are valid concerns.

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Definitions:

Dissociate

To separate or remove oneself from an association, relationship, or partnership.

Partnership

Two or more individuals engaging in a legal business structure, where management roles and profits are shared.

Dissolution

The closing down or ending of an entity or agreement, such as the dissolution of a company or marriage.

Partnership

A business structure where two or more individuals manage and operate a business in accordance with terms set out in a partnership agreement.