McConnell_Brue_Chapter02

Our response to this is no we were once a pure market

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Unformatted text preview: is is no. We were once a pure market system, but we discovered that pure capitalism had some inherent weaknesses at the extreme, too. • In pure capitalism, the role of government is diminished to that of protecting private property, maintaining a market environment, and providing national defense. Although our government continues to perform these functions, we have also evolved to the point at which our government performs many other functions, too. • We will discuss these additional functions in much greater detail at a later point. The greatest amount of change in this regard in our own economic system coincided with the Great Depression. Keep this in mind for a future discussion soon to come. A number of essential elements of the market system need to be mentioned as we attempt to comprehend how such a system is efficient. The first of these is technology. Market economies are quick to integrate technology because gains in this area equate to increases in productivity. A simple defi...
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