PUBLIC FINANCE

4. There is the school of thought that argues that governments have very limited intervening role in the markets and that government has only two legitimate function: providing public safety and order. Some of their assumptions are that the private markets are capable of reaching competitive market equilibrium, which ensures the most economic efficient outcome for society. Yet key facts indicate the size and growth of governments are enormous and continuous to grow role. Examine any four most common economic motivation for government role in economy or intervention in markets. [25 marks