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In our economic system, how is government involved in answering the four economic questions?

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Although the developed countries of the western hemisphere claim to be governed under a free-market, capitalist economy, the modern-day market would be unfeasible without a high degree of government intervention. Modern-day governments, including the United States government, must respond to the following four questions when managing the economy:

1.) What goods or services will be produced?

Although in most cases the US government does not become directly involved in determining what specific products merchants are or are not allowed to sell, it greatly facilitates economic dynamics through its control over taxes and building infrastructure. In Hawaii today, for example, state and federal government contractors are putting significant pressure on local homeowners in the northern parts of Oahu to sell their lands to the government so that new pineapple and taro plantations can be made. The government rationalizes this decision primarily by referring to the “eminent domain” clause of...

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