Public Finance Overview
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Questions and Answers

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?

  • 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?

  • Regulation function
  • Distribution function
  • Stabilization function
  • Allocation function (correct)
  • Why might government intervention be required for public goods in the market?

    <p>To ensure equitable distribution of goods</p> Signup and view all the answers

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