What are three opportunity costs of a greater government role in the economy

A free enterprise system is an economic system where a government places very few restrictions on the types of business activities or ownership in which citizens participate.

This type of system is often referred to by others as a free market, or capitalism.

However, this free market in the United States is threatened by government regulation so detailed and pervasive that it has begun to displace private management of nation's business.

Government regulation have negative effects on both businesses and consumers.

Greater government role in the economy is costly to implement. During the 1960s and 1970s, popular demand for government protection of consumers and of the environment resulted in the creation of new governmental agencies and regulations.

Applying the idea of opportunity cost, greater government role in the economy resulted to costly implementation of rules, cutting into profits, slowing growth, and forcing them to charge unnecessarily high prices.

Highly regulated industries, such as the airlines and telephone companies, pointed out that government rules and regulations stifled competition, resulting in prices that were arbitrarily high.

The growth in government oversight of industry also raised government spending.

See www.edtechnology.com - American Free Enterprise to learn more.

Tags: governmententerprise 

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