An Analysis of Market Failure and Government Failure Indicates

question 180

Multiple Choice

An analysis of market failure and government failure indicates

• A) government decision making is always preferable to using markets.
• B) market decision making is always preferable to public-sector action.
• C) government action is necessary whenever market failure occurs.
• D) both the market and the government may fail to meet conditions of economic efficiency; in each individual case, the choice of market or public-sector action requires careful evaluation.

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Definitions:

Denominated

Refers to the currency in which a financial transaction or commodity is quoted or dealt with.

Currency

The system of money in general use in a particular country or economic system.

Importers

Businesses or individuals that buy goods or services from abroad for sale in their own country, contributing to cross-border trade dynamics.

Exporters

Companies or individuals that sell goods and services produced in one country to buyers in other countries.