Question

What do you feel is a greater threat to a free market economy: a monopoly or a federally-regulated economy? I'm interested to know your opinions on government intervention. At what point has the government stepped too far and interrupted a market's abiity to self-regulate? What is the perfect balance between anti-trust regulation and self-regulation? Also, how do you feel about government bailouts? Do you feel that they inhibit the public's ability to determine demand? Thanks for your thoughts.

Answer 1

Part A

We know that free market economy means the economy without government regulations. It is the market which the prices for goods and services determined by the open market, means the operation of market forces of demand and supply operates free from any government interventions. The greater threat of free market economy is government intervention. When we observe the history, we can found that the greater threat of economic prosperity is not the little participation of the government but the active involvement of government in the market. In the recent history of financial crisis, economists criticize the failure of the government.

Part B

When we check the recent financial crisis we found that the government is too far from the deregulation of financial market. Indeed, even the direction that was left set up was, much of the time, not implemented overwhelmingly, and there was minimal shot of new, generous administrative changes being set up to coordinate the adjustments in the financial market place achieved by quick financial innovation. At times, deregulation was required, yet in numerous different cases the deregulation went much too far.

Part C

We know that antitrust regulation is the active involvement of the government. It formulates government because of the business practices that deprive consumers from the benefits of competition, which are higher prices and inferior goods and services. Self-regulation on the other hand the free market forces to balance the market. Administrative expert figures out who controls lingering law making, property rights hypothesis gives the common expository system, prompting an attention on exchange offs between effective law making by controllers and government– maker haggling. The self-control increases the efficiency with uncertainty over institutional implementation.

Part D

The government bailout means the extending financial support to a company or a country facing a potential financial threat. The bailout may or may not be sufficient for the reimbursement. It is because of the excessive government oversee and regulations. It sometime inhibits public ability to determine demand.