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 is based on the idea of minimal government intervention in the economy. Let's analyze each option:

• Option A: A government - controlled power plant is government intervention in the economy (building and operating a business), which goes against laissez - faire.
• Option B: Limiting foreign steel imports to protect domestic manufacturers is a form of trade protectionism (government intervention in trade), not laissez - faire.
• Option C: Removing taxes (a form of reducing government economic control) on goods shipped into a state is in line with the laissez - faire principle of less government interference in economic transactions.
• Option D: Preventing businesses from leaving by fining them is government intervention in the free movement of businesses (an economic activity), not laissez - faire.

Answer:

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