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Questions and Answers
What is the primary focus of public finance as explained in the text?
What is the primary focus of public finance as explained in the text?
- Examining the impact of government measures on society
- Designing tax systems
- Analysis of government interventions in markets
- Study of public sector economics (correct)
Why is government intervention necessary according to the text?
Why is government intervention necessary according to the text?
- To maximize profits for private businesses
- To reduce public spending
- To regulate market competition
- To address market failures in allocation and income distribution (correct)
What function does a market fulfill when prices accurately reflect real costs with no externalities?
What function does a market fulfill when prices accurately reflect real costs with no externalities?
- Regulation function
- Distribution function
- Stabilization function
- Allocation function (correct)
Why might government intervention be required for public goods in the market?
Why might government intervention be required for public goods in the market?
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