Explain to what extent should government intervene

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Few issues more pointedly divide Democrats and Republicans than the issue of economic regulation. The GOP has long held that the effective functioning of a market economy depends heavily on a lack of regulation of the economy - so that the "Invisible Hand" of Adam Smith might be able to allow companies to succeed or fail without interference by government. Republicans argue that market forces should be the prime determinant of commercial activity and individual entrepreneurship.

In contrast, Democrats have traditionally argued that a market economy necessarily creates "winners" and "losers," and that government has a responsibility to mitigate the harms to those who are negatively impacted by cyclical economic forces. Democrats also have promoted and enacted strong regulatory mechanisms that provide oversight of companies, especially concerning public health and public safety issues.

To what extent should government intervene in the economy? Are there limits to governmental oversight of corporations? Does regulation diminish the ability of businesses to thrive and compete in the global marketplace?

Reference no: EM13115856

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