For each of the following scenarios involving the U. S. government, determine th

Question

For each of the following scenarios involving the U. S. government, determine the primary function of government that is being served. The government decides that it will cut taxes in an attempt to move the economy out of a severe recession. Productive function whereby the government produces goods that are difficult for private markets to supply Productive function whereby the government maintains market competition Productive function whereby the government promotes economic stability through fiscal policies Productive function whereby the government redistributes income from rich to poor An entrepreneur incorporates a new business in the state of Delaware so that the firm can enter into a lease to use a factory and purchase raw materials. Reallocating resources Redistributing income Maintaining competition Enforcing contracts

Explanation / Answer

1. Correct choice is - C. Productive function whereby the government promotes economic stability through fiscal measures

Cutting taxes is a fiscal measure undertaken by the govt. to move the economy out of the recession and thereby bring economic stability

2. Correct choice is D. Enforcing Contracts

Incorporating a new firm is a legal requirement required to enforce the contract, i.e the lease.

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