Government intervention in conditions like inflation

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  In an expansionary policy, government boost the economy by cutting the taxes and increasing government expenditure to encourage more spending wherein in a concretionary policy, government reduces the demand and inflation in the economy by increasing the

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  It doesn't favor government intervention in the market. Keynesian theory is developed to overcome the drawbacks of the classical economic theory and it allows government intervention for the stability of the economy.

• Importance of price stability

  Knowledge bias can lead to what many may see as evils of such an economy, like insider trading, price fixing, price gouging, adverse selection, moral hazard, and the principal-agent problem which they claim justify government intervention to remedy.

• The monetarist program

  Monetarism: "Money matters" - arguments against government intervention.

• Introduction to Macroeconomics: The Big Picture

  The way in which they differed was that Keynes advocated that this intervention come from the government, and Friedman argued that it should come from the monetary authority since the government was inept at doing something like this.

• Export competitiveness by devaluing currency

  In order to sterilize the expanded domestic money supply resulting from the purchase of foreign exchange, the Asian central bank must sell government securities to the market.

• perfectly competitive markets

  In the absence of direct government intervention, the market economy has virtually no power to regulate itself in the public interest or resolve conflicts of interests that arise among market participants.

• Current Economic Conditions:

  Currently, even though the unemployment is high, there is government intervention to restore faith and improve the performance of the economy. Essentially, the economy has begun to rebound from the problems of the recession.

• US Economy and Ten Principles of Economics

  This is an excellent example of government intervention leading to improved market access. The second principle that we would like to refer to is that a country's standard of living depends on its ability to produce goods and services.