Question

which of the following actions would be taken by a government that supports laissez-faire capitalism?
a. a governor approves a law removing taxes that had previously been applied to all goods shipped into her state from neighboring states.

b. 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.

c. a president supports a law that would protect steel manufacturers by limiting the amount of foreign steel the country could import.

d. a national legislature approves plans for a government - controlled power plant that will provide cheap electricity for its poorest regions.

Explanation:

Laissez - faire capitalism emphasizes minimal government intervention in the economy, allowing free - market forces to operate.

• Option A: Removing taxes on goods from neighboring states reduces government - imposed trade barriers, which is in line with the idea of less government interference in economic activities.
• Option B: Requiring businesses to pay large fines if they move out is a form of government intervention to restrict business decisions, which goes against laissez - faire principles.
• Option C: Limiting foreign steel imports is a trade protectionist measure, which is government intervention in international trade, not in line with laissez - faire.
• Option D: Approving a government - controlled power plant means the government is directly involved in running a business, which is against the idea of minimal government intervention in the economy.

Answer:

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