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The function of a government to provide goods that cannot normally be provided by market mechanisms between individual customers and producers, is known as:
  • a)
    Distribution function
  • b)
    Allocation function
  • c)
    Stabilization
  • d)
    Protection
Correct answer is option 'B'. Can you explain this answer?
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The function of a government to provide goods that cannot normally be ...
The allocation function is that part of government tax and expenditure policy which is concerned with influencing the provision of goods and services in the economy. 4.  This means creating conditions to promote competition among producers, as well as the welfare of consumers.
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The function of a government to provide goods that cannot normally be ...
The Allocation Function of Government:

The allocation function of government refers to the role of the government in distributing resources and goods in the economy. It is the function of the government to provide goods and services that cannot normally be provided by market mechanisms between individual customers and producers. This function is carried out through various means such as taxation, subsidies, and regulation.

Explanation:

The correct answer to the question is option 'B', which states that the function of the government to provide goods that cannot normally be provided by market mechanisms between individual customers and producers is known as the allocation function. This means that the government intervenes in the economy to allocate resources in a way that benefits society as a whole, rather than leaving it to the free market to determine.

The allocation function of the government involves the following:

1. Provision of Public Goods: The government provides public goods such as infrastructure, defense, law and order, and education, which cannot be provided efficiently by the market.

2. Redistribution of Income: The government redistributes income through taxation and transfer payments to reduce income inequality.

3. Regulation of Markets: The government regulates markets to prevent monopolies, promote competition, and protect consumers.

4. Provision of Merit Goods: The government provides merit goods such as healthcare and education, which have positive externalities and are under-consumed by the market.

Conclusion:

Thus, the allocation function of the government is an important function that helps to ensure the efficient allocation of resources and the provision of public goods and services. It helps to ensure that resources are allocated in a way that benefits society as a whole, rather than just a few individuals or groups.
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The function of a government to provide goods that cannot normally be ...
The goods that can be marketed by normal market mechanism can be distributed properly but the things which can't be distributed by normal procedure of selling and purchasing is distributed by allocation function of government. Example: National Defence, Public Parks and National Highways etc. The reason of government providing such goods is the nature of public goods.
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The function of a government to provide goods that cannot normally be provided by market mechanisms between individual customers and producers, is known as:a)Distribution functionb)Allocation functionc)Stabilizationd)ProtectionCorrect answer is option 'B'. Can you explain this answer?
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