Home › Karnataka PUC II › economics › macroeconomics_introduction › Which statement BEST describes the role of the S…
Which statement BEST describes the role of the State in the macroeconomy as discussed in the chapter?
AThe State only sets laws and never produces
BThe State frames and enforces laws, may undertake production, imposes taxes, and spends on infrastructure / schools / health
CThe State only manages currency printing
DThe State acts identically to a private firm maximising profit
Answer & Solution
Correct answer: B. The State frames and enforces laws, may undertake production, imposes taxes, and spends on infrastructure / schools / health
The State (called 'Government' in the chapter) plays multiple roles: legal framework, production, taxation, public expenditure on infrastructure / education / health. It is distinctly different from a profit-maximising firm.
Related questions
Which combination of expenditures is most accurately classified as 'investment expenditureWhich statement BEST distinguishes macroeconomic decision-makers from microeconomic agentsApproximately by how much did aggregate output in the USA fall between 1929 and 1933, the Which of the following is NOT a characteristic of a capitalist economy as defined in the cIn the classical tradition before Keynes, the dominant view was thatWhich sector is NOT one of the four major sectors of a macroeconomy in the NCERT frameworkWhich of the following is an example of an EXPORT for an economy?Which of the following best defines 'unemployment rate'?