In most economies, the government plays a role in the market system. Governments enforce the rules of the game, impose taxes, and may control prices through price ceilings or price supports. These actions necessarily may create shortages or surpluses. In most developed and interdependent economies, the necessity of the government's playing some role in the economy is disputed. The author of the passage would probably agree that
A. economic surpluses are always good.
B. market shortages are a necessary evil.
C. higher prices strengthen the economy.
D. price ceilings add to the shortages.
E. surpluses are not usually created intentionally.
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In most economies, the government plays a role in the market
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Option A - CORRECT.
This statement is right and is in agreement with the authors reasoning. Since the government play a vital role in the market structure, enforce the role of the game, impose taxes and may control taxes through ceiling or price support, then it is possible for the government to generate surplus revenues which will affect economic growth positively.
Option B - INCORRECT.
This statement is real only when there is no good structure on ground to generate revenues to boost the economy.
Option C - INCORRECT.
Higher prices may strengthen the economy but it is at the expense of the people. The people may tend to dislike the government for imposing higher taxes on them.
Option D - INCORRECT.
This statement is not really true, because price ceiing is used by the government to regulate taxes.
Option E - INCORRECT.
Surpluses are not created without an imposed increase in taxes on the people by the government. So therefor it is intentional.
This statement is right and is in agreement with the authors reasoning. Since the government play a vital role in the market structure, enforce the role of the game, impose taxes and may control taxes through ceiling or price support, then it is possible for the government to generate surplus revenues which will affect economic growth positively.
Option B - INCORRECT.
This statement is real only when there is no good structure on ground to generate revenues to boost the economy.
Option C - INCORRECT.
Higher prices may strengthen the economy but it is at the expense of the people. The people may tend to dislike the government for imposing higher taxes on them.
Option D - INCORRECT.
This statement is not really true, because price ceiing is used by the government to regulate taxes.
Option E - INCORRECT.
Surpluses are not created without an imposed increase in taxes on the people by the government. So therefor it is intentional.
