Government's Role in Economic Stability Quiz
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Questions and Answers

What is the role of government in market economies?

  • To create monopolies for economic stability
  • To correct market failures and ensure fair competition (correct)
  • To maximize profits for businesses
  • To eliminate individual freedoms for the collective good
  • What are the tools used by policymakers to maintain a balance in market economies?

  • Taxation, subsidies, and regulations (correct)
  • Tax evasion, unfair labor practices, and environmental degradation
  • Monopolistic practices, price fixing, and unfair competition
  • Bribery, corruption, and insider trading
  • What do antitrust laws aim to prevent in market economies?

  • Small businesses
  • Consumer choices
  • Monopolies (correct)
  • Fair competition
  • What do fiscal policies involve during economic downturns?

    <p>Increased government spending and tax cuts</p> Signup and view all the answers

    What do central banks do through monetary policies during economic downturns?

    <p>Lower interest rates to encourage borrowing and investment</p> Signup and view all the answers

    Governments do not intervene in market economies to correct market failures.

    <p>False</p> Signup and view all the answers

    During periods of economic downturns, fiscal policies involve decreased government spending.

    <p>False</p> Signup and view all the answers

    Central banks may lower interest rates through monetary policies to encourage borrowing and investment.

    <p>True</p> Signup and view all the answers

    Antitrust laws aim to promote monopolies in market economies.

    <p>False</p> Signup and view all the answers

    Monetary policies are employed to manage economic fluctuations.

    <p>True</p> Signup and view all the answers

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