Question

In 2008 the United States government loaned money to companies in the automobile industry.
This is an example of which of the following?
A
market economic system

B
deregulation

C
regulation

D
pure competition

Answer 1

Answer:

C

Explanation:

Regulation is broadly defined as imposition of rules by government, backed by the use of penalties that are intended specifically to modify the economic behaviour of individuals and firms in the private sector. Various regulatory instruments or targets exist.

Technically, the correct term would be an incentive, or government guaranteeing loans. But government in general should never mess with the private sector. They tried that in the 1920s and it led to the Great Depression.