NCEIV36 0-0806

Question 1

Lesson 36

Answer 1

Lesson 36 The cost of government

Question 2

If a nation is

Answer 2

If a nation is essentially disunited, it is left to the government to hold it together.

Question 3

This increases

Answer 3

This increases the expense of government and reduces correspondingly the amount of economic resources that could be used for developing the country.

Question 4

And it should n

Answer 4

And it should not be forgotten how small those resources are in a poor and backward country.

Question 5

Where the cost

Answer 5

Where the cost of government is high, resources for development are correspondingly low.

Question 6

This may be ill

Answer 6

This may be illustrated by comparing the position of a nation with that of a private business enterprise.

Question 7

An enterprise h

Answer 7

An enterprise has to incur certain costs and expenses in order to stay in business.

Question 8

For our purpose

Answer 8

For our purposes, we are concerned only with one kind of cost – the cost of managing and administering the business.

Question 9

Such administra

Answer 9

Such administrative overheads in a business are analogous to the cost of government in a nation.

Question 10

The administrat

Answer 10

The administrative overheads of a business are low to the extent that everyone working in the business can be trusted to behave in a way that best promotes the interests of the firm.

Question 11

If they can eac

Answer 11

If they can each be trusted to take such responsibilities.

Question 12

and to exercise

Answer 12

and to exercise such initiative as falls within their sphere, then administrative overheads will be low.

Question 13

It will be low

Answer 13

It will be low because it will be necessary to have only one man looking after each job, then the business will require armies of administrators, checkers, and foremen and administrative overheads will rise correspondingly.

Question 14

As administrati

Answer 14

As administrative overheads rise, so the earnings of the business after meeting he expense of administration, will fall;

Question 15

and the busines

Answer 15

and the business will have less money to distribute as dividends or invest directly in its future progress and development.

Question 16

It is precisely

Answer 16

It is precisely the same with a nation.

Question 17

To the extent t

Answer 17

To the extent that the people can be relied upon to behave in a loyal and responsible manner, the government does not require armies of police and civil servants to keep them in order.

Question 18

But if a nation

Answer 18

But if a nation is disunited, the government cannot be sure that the actions of the people will be in the interests of the nation;

Question 19

and it will hav

Answer 19

and it will have to watch, check, and control the people accordingly.

Question 20

A disunited nat

Answer 20

A disunited nation therefore has to incur unduly high costs of government.