In View of the Possible Need for Government Action in Markets

question 11

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 almost always has more information than the private parties.
• B)Private markets have no means of dealing with information asymmetries on their own.
• C)The government is itself an imperfect institution.
• D)Legally, the government can rarely intervene in markets.

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Definitions:

International Manufacturing

The production of goods in multiple countries to take advantage of global efficiencies such as lower labor costs.

Chemical Derivatives

are substances that are derived from other substances through chemical processes, often possessing different physical or chemical properties.

Systems Thinking

A holistic approach to analysis that focuses on the way that a system's constituent parts interrelate and how systems work over time within the context of larger systems.

Sustainability Concept

The principle of meeting present needs without compromising the ability of future generations to meet theirs, particularly in environmental, social, and economic contexts.