Question

For each of the following scenarios involving the U.S. government, determine the primary function of government that is being served.
a. Microsoft, the operating system giant, was recently accused of illegal business practices aimed at significantly increasing its market share.
b. Productive function whereby the government promotes economic stability through fiscal policies.
c. Productive function whereby the government maintains market competition.
d. Productive function whereby the government redistributes income from rich to poor.
e. Protective function whereby the government enforces property rights.
f. Members of the Federal Reserve Bank, the central bank of the United States, meet every six weeks to adjust interest rates based on economic conditions.
g. Maintaining competition
h. Redistributing income
i. Promoting stability
j. Reallocating resources

Answer 1

Answer:

a. Microsoft, the operating system giant, was recently accused of illegal business practices aimed at significantly increasing its market share.

Answer: Main objective of Microsoft is to dominate the market and create a monopoly environment. If it is allowed then people of the economy will suffer. They have to pay for the product at a high monopoly price. Microsoft will gain at the cost of customers. So social welfare will decrease. Thus by this act government has tried to maintain market competition.

b. Members of the Federal Reserve Bank, the central bank of the United States, meet every six weeks to adjust interest rates based on economic conditions.

Answer: Objective is to promote stability in the economy.