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Unformatted text preview: ted, Government
The final critical component of market
systems in advanced industrial economies is
that of an active, but limited, government. In market systems, governments protect the right to
own property and maintain national defense. Both are
Although market systems have highly efficient essential to assure market systems function at efficient
automatic market functions in place, there are levels. In addition, the government must also
also market failures that prompt the need for compensate for a certain amount of market failure.
a compensating (and sometimes regulating)
Although market systems are highly efficient, they are
not perfect and thus prompt a certain amount of
inherent failure. Market failure is another area we will
revisit at a later date.
Learning Objective 2-2 Slide
17 Key Market System Characteristic #1.
Private Property —Most property (land and
capital) is owned by individuals and firms
when a market system exists in a society.
• The process o...
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- Spring '09