Question

Define the term laissez-faire. What is the role of the government in a laissez-faire economy?

Answer 1

Answer:

Laissez-faire is an economic system in which transactions between private parties are absent of any form of government intervention such as regulation, privileges, imperialism, tariffs and subsidies. As a system of thought, laissez-faire rests on the following axioms: The individual is the basic unit in society. The only role of government in a laissez-faire economy is to prevent any coercion against individuals. Theft, fraud, and monopolies prevent rational market forces from operating. Laissez-faire policies need three components to work: capitalism, the free market economy, and rational market theory.

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Answer 2

Answer:

Responses will vary. A sample response follows: Laissez-faire means let them act. In a laissez-faire economy, the role of the government is minimal. Rather, the economy is guided by the invisible hand, the forces of self-interest and competition working together to provide what consumers want at reasonable prices.

Explanation: