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    adverse selection and moral hazard

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    I need an answer to the following question: Is there anything the U.S. government can do today to improve the nation's competitive position in the global economy?

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    State is an indispensable instrument of economic development and it take undertake activities that would compensate for the market failure. Market failure is perceived as the inability of markets to allocate optimally resources over time.
    The role of the government may include:
    A) Determination of the conditions under which individuals or groups would be permitted to enter certain lines of business or avail of public facilities and scarce resources.
    B) Regulating the conduct of Industrial or business through legislation such as telecom regulatory authority in India has laid down fair rules for the industry.
    C) Regulating the relationship between different segments or interest groups in the economy so as to protect legal rights.
    D) By providing an analytical framework for the industries, private sector, externalities such as pollution ...

    Solution Summary

    Examine the effects and implications of adverse selection and moral hazard.