UPSC Economics People as Resource Question Bank Structure of Economy and Human Resources in India

  • question_answer
          Which of the following are the roles of government in the economy:
    1. Provision of public goods
    2. Provision of merit goods
    3. Poverty reduction
    Select the correct answer using the codes given below:

    A) 1 only              

    B)        2 only

    C) 3 only              

    D)        1, 2 and 3

    Correct Answer: D

    Solution :

    Provision of public goods like defense which no private agency can be entrusted with. Provision of merit goods - goods like education and housing - through policies which encourage the consumption of such goods and discourage the use of non-merit goods like cigarettes. Poverty reduction is considered a prime responsibility of all modern governments, as the market caters to the needs of only those who can afford to pay, not of the poor.

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