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Economics is the study of how society chooses to allocate its scarce productive resources (labor, capital, land, entrepreneurial talent).
In a mixed economy, elements of both central planning and market allocation of resources are used in allocating productive resources. The United States economy is a mixed economy, with a bias towards market allocation of resources. This means most resources are allocated in the private sector by way of markets.
Discuss whether you favor a larger or smaller role of government in the economy.
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My own preference is for a system in which government plays less of a role, rather than more, in the allocation of resources.
I say this for two reasons. First, a smaller role for government is more consistent with the personal liberties that we Americans prize. Given our devotion to liberty, it makes sense to allow people to choose what they want to do with their property more often rather than less often.
Second, a smaller role for government seems to be more likely to result in economic growth. If we are to maintain and increase our standard of living, we need to have the private sector be relatively free. We need to allow the market to decide (for the most part) what things are made and how they are made.
Thus, I tend to prefer less government intervention in the economy both on the grounds of liberty and on the grounds of efficiency and economic growth.
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