Market Failure Market failure refers to the shortcomings or inadequacies of the market system of economic organisation in achieving allocative efficiency in all circumstances. Market failure can occur in a number of areas of economic activity such as the following: - The market fails to provide public goods which may be socially valuable but because of a lack of incentive, the private sector fails to provide them in sufficient quantity and quality - The market …showed first 75 words of 1143 total…

…showed last 75 words of 1143 total…budget where G = T. Taxpayers may save less as well as spend less. A balanced budget was achieved in the 1997-98 budget An Expansionary fiscal policy involves a net increase in government spending either through lower taxes or increased government spending or a combination of the two. In the 1990-91 recession the government undertook explicit spending and taxation decisions to boost growth which contributed to an increase in the structural component of the budget deficit.