Governments of country A and country B spend the same amounteach year. Spending

Question

Governments of country A and country B spend the same amounteach year. Spending on functions relating to dealing with marketexternalities and public goods accounts for 25 percent ofgovernment expenditures in country A but makes up 75 percent ofgovernment expenditures in country B. Funding to provide meritgoods and efforts, to restrict the production of demerit goodsaccount for 75 percent of government expenditures in country A butonly 25 percent of government expenditures in country B. Whichcountry`s government is more heavily involved in the economythrough economic functions of government as opposed to politicalfunctions? Explain. I appreciate your answers. Governments of country A and country B spend the same amounteach year. Spending on functions relating to dealing with marketexternalities and public goods accounts for 25 percent ofgovernment expenditures in country A but makes up 75 percent ofgovernment expenditures in country B. Funding to provide meritgoods and efforts, to restrict the production of demerit goodsaccount for 75 percent of government expenditures in country A butonly 25 percent of government expenditures in country B. Whichcountry`s government is more heavily involved in the economythrough economic functions of government as opposed to politicalfunctions? Explain. I appreciate your answers. I appreciate your answers.

Explanation / Answer

Ok, I would say that Country A is more heavily involved in theeconomy through its economic functions. Externalities are apublic problem. An example of an externality is pollution,which is bad for the environment and the country as a whole. Since country B spends more towards preventing these and upholdingpublic goods, it is spending more towards the political functionsof government, since government should provide for its people anduphold public good. Country A spends more towards merit anddemerit goods, which even though is somewhat related to publicgood, is more towards the economic function of government (since itis offering funds and such). Providing merit goods infringesmore on individual liberty, which government should protect, so itis not a political function, but rather an economic function. Therefore, Country A is mroe heavily involved in the economythrough economic functions of government as opposed to politicalfunctions. I hope this answer helped and was understandable. If you haveany questions, feel free to msg me.

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