I have a writing assignment consisting of writing a 5-10 page essay regarding th

Question

I have a writing assignment consisting of writing a 5-10 page essay regarding the pros and/or cons of government intervention in the state of the economy. According to the federal government and as stated in the Full Employment Act of 1946, the Federal government (Congress and the Federal Reserve System) has taken an explicit and active role in trying to control the state of the economy in order to promote full employment, price stability, and economic growth. However, there are segments of the population that do not agree with this principle.

One way to simplify the argument is to consider the Classical model (against government intervention) and the Keynesian (in favor of government intervention) views regarding government intervention in the economy. Your job is to write an essay in which you describe your perspective on this issue. You can make a case that is completely against it, completely in favor of, or a more balanced approach (pros and cons) regarding government intervention in the economy. Your grade will no depend on whether or not the grader agrees with your arguments but on how well you support them.

I need help on obtaining some information on this for my essay. If someone could please also explain this to me because I am kind of confused. So I need some resources I could use and some help in what my professor is asking for , so some information on what I could write about in my essay. I hope this makes sense. Please help. Thank you

Explanation / Answer

Free market economists argue that government intervention should be strictly limited as government intervention tends to cause an inefficient allocation of resources.

Arguments for government intervention:

Arguments against government intervention:

The main appeal of governmental imposed price controls is that they can ensure that citizens can purchase what they need in times of national economic hardship. Well designed price controls can ensure that basic staples are affordable, minimize the possibility of shortages, and prevent price gouging when shortages occur. By keeping prices artificially low through price ceilings, economists argue that demand is increased to a point where supply cannot keep up, leading to a shortage in the controlled product.

An externality is any effect on people not involved in a particular transaction. Governments can intervene by taxing negative externalities or subsidizing positive externalities. Free markets will generally produce less than the optimal amount when a good is nonexcludable and nonrivalrous, which means that a government can make the market more efficient by producing the public good itself.

There is no real model of a society run in the absence of government intervention. Even the most extreme libertarian economists would accept there needs to be some state protection of property rights and spending on national defence. The debate comes on the extent of government intervention. This needs to take place on each aspect of government intervention.

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.