Mixed Economy

Direction(Q.1-15): Read the pursual passage carefully and answer the some(prenominal) questions following it. You are required to select your answer base on the contents of the passage and opinion of the author only. In a mixed economy, apart from the private sector, there is the political sympathies which plays a very important role. In this chapter, we shall not act up with the myriad ways in which it influences economic life advance limit ourselves to three distinct functions that operate by the assessation income and expenditure measures of the government budget. First, certain goods, referred to as public goods (such as national defence, roads, government administration), as distinct from private goods (like clothes, cars, alimentation items), cannot be provided through the market mechanism, i.e. by transactions amongst singular consumers and producers and must be provided by the government. This is the allocation function. Second, through its tax and expendi ture policy, the government attempts to bring about a dissemination of income that is considered fair by society. The government affects the personal useable income of households by making transfer payments and collecting taxes and, therefore, can cook the income dispersal. This is the distribution function.

Third, the economy tends to be subject to substantial fluctuations and may sustain from prolonged periods of un habit or inflation. The overall level of work and prices in the economy depends upon the level of aggregate demand which is a function of the spending decisions of millions of private economic agents apart from the government. These deci! sions, in turn, depend on many factors such as income and deal availability. In any period, the level of expenditures may not be sufficient for full utilization of labour and other resources of the economy. Since payback and prices are generally rigid downwards (they do not fall below a level), employment cannot be restored automatically. Hence, policy measures are...If you want to get a full essay, order it on our website: BestEssayCheap.com

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