Question

Briefly answer while employing at least one economic term.

Evaluate the statement: “The government should have no place in a capitalistic market system.”

Answer 1

"The government should have no place in a capitalist market system"

Two important freedoms;freedom of enterprise and freedom of choice are important features of a competitive capitalist market system.This is essential as without it a capitalist market system would not exist.The above statement means if there is huge existence of government interference in the economy,in case of command market system,it causes damage to organization,innovation as well as growth.However there is little place for the government in the capitalist market system.The government can work towards promoting economic stability and growth in the economy.The government can also help by providing goods which are not produced or which are under produced in the economy.It also helps in redistributing income.While major decisions like what and how much to produce,rests with the market system,the government still have a prominent part in the marketing system of the market structure.