Question:
To what extent do you think the government should be involved in the free enterprise economy?
Defend your answer.
Answer:
The government’s involvement in the free enterprise economy should be strictly limited.
However, the government might intervene to do the following:
1- to ensure that income is distributed equally within society.
2- to regulate monopoly acts and unfair business practices that hinder competition in markets.
3- to overcome market failure.
4- to impose taxes on businesses and do tax reformation.
5- to apply the fiscal and monetary policy in times of recession.
6- to apply automatic stabilizers.
7- to enhance infrastructure.
8- to provide supports and assistance to unemployed people.
