Strengths and Weaknesses of Market-Oriented Policies
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Strengths and Weaknesses of Market-Oriented Policies

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@LovedCamellia

Questions and Answers

What is the main purpose of incentive-related policies involving adjustments to taxes?

To improve incentives to work, innovate, and invest

How does trade liberalization affect markets?

It increases efficiency in production and lowers prices

What is a major benefit of freely floating exchange rates?

Automatically adjusting to excess demand or supply of a currency

How does opening up countries to free trade impact markets?

<p>It improves the allocation of resources and increases economic growth</p> Signup and view all the answers

What is the role of market-determined exchange rates in international transactions?

<p>To reflect supply and demand forces for a currency</p> Signup and view all the answers

How do larger free markets resulting from trade liberalization impact consumer choice?

<p>Increase consumer choice</p> Signup and view all the answers

What is the main idea behind market-oriented policies?

<p>To rely on free markets and competition for resource allocation</p> Signup and view all the answers

How do market-determined prices help in a market-oriented economy?

<p>By acting as signals and incentives for decision-making</p> Signup and view all the answers

What is the purpose of policies encouraging competition like deregulation and privatisation?

<p>To make markets more competitive and improve resource allocation</p> Signup and view all the answers

How do labour market reforms contribute to market-oriented policies?

<p>By allowing free market forces to improve resource allocation</p> Signup and view all the answers

Which factor is NOT a benefit of policies encouraging competition in a market-oriented economy?

<p>Higher prices for consumers</p> Signup and view all the answers

Why are freely floating exchange rates considered a part of market-oriented policies?

<p>To allow exchange rates to be determined by supply and demand in free markets</p> Signup and view all the answers

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