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True or False
Exams| A) Poverty traps that cannot be escaped through free choice | B) Monopoly power that emerges naturally in the market and allows businesses to exploit consumers |
| C) Businesses pay workers low | D) All of the above |
Explanation:
Laissez-faire is simply a way to describe a government's hands-off approach to economic policies. This approach was particularly prevalent in the United States at the turn of the 20th century, which led to numerous issues within American manufacturing.
There are many outcomes of laissez-faire economic policies. Some of the outcomes of laissez-faire economics were:
* Businesses pay workers low.
* Pollution of air and water.
* Poverty traps that cannot be escaped through free choice.
* General glut that results from overproduction or underconsumption
* Monopoly power that emerges naturally in the market and allows businesses to exploit consumers.
* Exploitation of the working class that pushes wages down to subsistence and compels laborers to work in harsh and unsafe conditions.
* External economies that generate situations where desirable goods are underproduced on the market, and undesirable goods are overproduced on the market.
* Public goods that are not supplied by the market due to free-rider problems.