Question

which of the following actions would be taken by a government that supports laissez - faire capitalism?
a. a national legislature approves plans for a government - controlled power plant that will provide cheap electricity for its poorest regions.
b. a president supports a law that would protect steel manufacturers by limiting the amount of foreign steel the country could import.
c. a governor approves a law removing taxes that had previously been applied to all goods shipped into her state from neighboring states.
d. a state legislature approves a plan to prevent businesses from leaving the state by requiring them to pay large fines if they choose to move to another state.

Explanation:

Laissez - faire capitalism emphasizes minimal government intervention in the economy. Removing taxes (as in option C) is an example of reducing government interference. In option A, a government - controlled power plant shows government intervention. Option B with limiting foreign steel import (protectionism) is government intervention. Option D with fining businesses for leaving is also government intervention.

Answer:

C. A governor approves a law removing taxes that had previously been applied to all goods shipped into her state from neighboring states.