“Markets alone do not always lead to the best economic and social outcomes. In fact, markets often lead to inefficient and/or unfair outcomes. This explains why most people agree that we need Governments to be major economic players. Not everyone agrees, Price, Cost Quantity 2000 50 A B 3 BEE1029 Turn over however, and some believe government intervention is part of the problem not the solution.” Discuss the statement by explaining why (and how) government intervention in the economy can be ‘part of the problem’ and how a country might try to reduce the possibility of that happening.

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The statement that government intervention in the economy can be part of the problem reflects the debate surrounding the role of governments in economic affairs While government intervention can often ... View the full answer