The government will not set artificial rates on products.

Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter2: Some Tools Of The Economist
Section: Chapter Questions
Problem 6CQ
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The government will not set artificial
rates on products.
What aspect of a capitalistic society
makes this possible?
A. Free Markets
B. Self-Interest
C. Private Property
Transcribed Image Text:The government will not set artificial rates on products. What aspect of a capitalistic society makes this possible? A. Free Markets B. Self-Interest C. Private Property
Expert Solution
Step 1

In case of a market failure, the government intervenes in the market and sets an artificial price in the form of price ceiling or price floor as per the requirement.

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