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3. According to Ibn Taymiyya, when does goverment need to intervene in themarket by fixing
prices?
a. The commodity subject to market imperfection is of a particular necessity to the consumers
at large
b. There is manipulation of the market conditions through the sellers refraining from sale in
anticipation of greater profits in future
c. Manipulation of market forces through monopolistic activities when commodity is for
manufacture
d. The manipulation of the market is for the purpose of achieving a price higher than the fair
value of goods
e. the fixation of prices should be fairly exercised
f. the ultimate objective of price fixation is to remove injustice to the community
4. According to Ibn Khaldun, why is commercial activity on the part of the ruler harmful and ruinous
to the tax system?
a. farmers and merchants will find it difficult to buy livestock and merchandise and to procure
cheaply the things that relate to farming and commerce
b. the ruler can distribute much of the agricultural produce and available merchandise at will
c. the ruler may force the buying merchants to buy from him, and this may be at the highest
price
d. State competition with public ruins the fiscal structure as most of the revenue from taxes,
and custom duties, come from farmers and merchants
5. According to Ibn Khaldun, how does the labor surplus problem can be solved? Explain.
As the combined labor available in a town or a city produced more than the needs and
necessities of the workers, the surplus labor may be directed towards providing two things:
1. the conditions and customs of luxury in the city, and
2. the satisfaction of the needs of the inhabitants of other cities
6. Which financial risks were mentioned in Muqaddimah?
a. Physical risk, tampering with the merchandise which may ruin it
b. Bad debts, delay of payment which may ruin the profit, since such delay while it lasts
prevents any activity that could bring profit
c. Moral hazard, There will also be non-acknowledgment or denial of obligations, which may
prove destructive of ones capital unless the obligations have been stated in writing and
properly witnessed. The judiciary is of little use in this connection, since the law requires
clear evidence.
d. Loss of profit or capital, All this could cause the merchant a great deal of trouble. He may
make a small profit, but only with great trouble and difficulty, or he may make no profit at
all, or his capital may be lost.