Chapter 2.2, Problem 4R

To determine

To Check: The reason to resist the government intervention.

Explanation of Solution

The economic system in which a private person owes the capital goods and production of commodities is determined by the market force demand and supply is known as a capitalist economy. Moreover, the main objective of the capitalist economy is to maximize its profit. However, the involvement of government in a capitalist economy is very little. Its involvement is limited up to the security level, for example, the government monitors the money supply, weapons, etc. The government works with the motive of social welfare but the capitalist system works for a profit. Therefore, a government resists intervention as it may turmoil the profit motive.