ECO 561 Week 2 Government Interventions vs. Market Based Solutions

Jun 28th, 2016
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The theory of market economies emphasizes freedom of choice and limited government intervention. The classic argument for government intervention is market failure - the inability of the market economy to correct itself from a dysfunctional state (such as the Great Depression). Examine one case of significant government intervention as it relates to your current industry of employment or an industry in which you are interested in working. Examples of intervention programs include, but are not limited to: • US agriculture support programs • Low income support programs (Food Stamps, Earned Income Tax Credit, Child Tax Credit, and Temporary Assistance to Needy Families) • Medicaid, Children's Health Insurance Program, Obamacare • Low income rent controls and housing vouchers • Government promoting renewable energy sources, discouraging fossil fuel sources Develop a 16-slide presentation including detailed speaker notes or voiceover including the following: • Describe the intervention and d

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U.S. Agriculture Support ProgramsECO/561Intervention and History The intervention discussed deals with agricultural subsidies programs.Initiations of this program in the United States started in 1933.There werenumerous trade barriers created for various agricultural products. The creation of this program led to the government acquiring the power todetermine the minimum prices and included various government stockacquisitions and schemes that would cut supplies that aimed at destroying thequality of livestock (Bittman, 2011).Definition of Subsidies An agricultural subsidy refers to a government subsidy directed to agribusinessesand farmers for the sole purpose of supplementing their revenue, managing theirsupply of farm produce and also assessment and determining the cost and amountof the products such as milk, corn, and wheat. These programs stabilize markets that handle agricultural commodities, help inrural development and also support farmers with relatively low incomes. Theseprograms also ensure national food securities, proper farm marketing structuresand also provide numerous other important services.Government intervention and market-based solutionsGovernment interventionmarket-based solutionsGovernment intervention in businessactivity enhances the element of fairness inthe economy. Higher prices cannot exploitconsumers in cases of a monopoly.Market-based solutions are highlyinsufficient because they need regulation

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