The
The Role of Government
What makes the product market in a market economy free? All consumers, because of private property laws, have the income from their resources (wages, rent, dividends) to buy products. Because of antimonopoly laws, all firms can sell products. And because of contract laws, accounts between the two parties can be settled.
Adam Smith said these provisions for workable markets and also for the national defense was the sole limited role of government in an economy. Otherwise, laissez-faire, government should let business pursue its own ends. Most writers agree that these are at least the minimal role for government.
One of the bases of Smith's and free market economists' limited government position is the vital function of prices to signal scarcity. High prices ration the use of resources and products and simultaneously encourage the conservation and production of those that are scarce
There are a number of negative consequences of government......
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Approximate Word Count: 1566
Approximate Pages: 7 (250 words per double-spaced page)
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