📚 Learning Guide
Government Intervention and Market Efficiency
easy

What is the primary goal of government intervention in a market economy?

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Learning Path
Learning Path

Question & Answer
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2
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3
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Choose the Best Answer

A

To enhance market efficiency

B

To increase profit for businesses

C

To eliminate competition

D

To reduce consumer choice

Understanding the Answer

Let's break down why this is correct

Answer

The primary goal of government intervention in a market economy is to promote fairness and efficiency. Sometimes, markets can fail to provide goods and services that are essential for society, like healthcare or education, leading to inequality or poor outcomes. By stepping in, the government can help ensure that everyone has access to these important resources. For example, if a company is polluting the environment, the government can create regulations to limit this pollution, which helps protect public health and the environment. Ultimately, government intervention aims to balance the needs of the economy with the welfare of its citizens.

Detailed Explanation

The main aim of government action is to make markets work better. Other options are incorrect because Some think the government helps businesses make more money; It's a common belief that the government wants to stop competition.

Key Concepts

Market efficiency
Topic

Government Intervention and Market Efficiency

Difficulty

easy level question

Cognitive Level

understand

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