When the government is involved a new aspect is added to the market. firstly it changes from a Free Market to a Open Economy. The government gives out transfer payments to households and subsidies to firms while collecting taxes from both. Also directly to the resource market the government has expenditures and receive land, labor, capitol, and rent. ability. While in the product market they have more expenditures and receive goods and services.
May 26th, 2015
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