Explore tens of thousands of sets crafted by our community.
The Economic Functions of Government
25
Flashcards
0/25
Ensure Competitive Markets
Government ensures markets are competitive by prohibiting anti-competitive practices and enforcing fair trade.
Protect Property Rights
Government enforces laws that protect ownership and trade of property, which is essential for functioning markets.
Stabilize the Economy
Government uses fiscal and monetary policy to smooth out economic cycles, reduce unemployment, and control inflation.
Provide Public Goods
Government supplies goods like national defense and public parks that are non-excludable and non-rivalrous.
Foreign Economic Policy
Government shapes international economic relations through trade agreements, tariffs, and aid programs.
Regulate Monopolies
Government regulates or breaks up monopolies to promote competition and protect consumers.
Conduct Monetary Policy
Government controls the money supply and interest rates to manage economic activity and inflation through a central bank.
Infrastructure Development
Government builds and maintains infrastructure such as roads, bridges, and utilities that are essential for economic activity.
Manage Externalities
Government uses taxes, subsidies, and regulations to correct for external costs or benefits not reflected in market prices.
Promote Social Equity
Government pursues policies to address historical inequities and provide equitable access to opportunities for all citizens.
Correct Market Failures
Government intervenes when markets fail to allocate resources efficiently, such as through the imposition of taxes or subsidies.
Regulate Financial Markets
Government oversees financial institutions and markets to prevent fraud, ensure stability, and protect investors.
Trade Regulation
Government establishes rules governing trade between nations to protect domestic industries and promote exports.
Control Inflation
Government uses monetary policy, fiscal policy, and regulation to keep inflation in check.
Promote Economic Growth
Government invests in infrastructure, education, and technology to foster a conducive environment for economic growth.
Direct Economic Planning
Government sets economic priorities and directs resources towards those via industrial policies or five-year plans.
Promote Labor Standards
Government sets minimum wages and workplace safety standards to protect workers.
Subsidize Industries
Government provides financial assistance to sectors deemed strategically important for national interests or economic stability.
Innovate Through Research and Development
Government funds research and development efforts to drive innovation and technological advancement.
Provide Insurance
Government offers social safety nets like unemployment insurance and disaster relief to mitigate individual risks.
Provide a Legal Framework
Government establishes the legal structures that facilitate market transactions, contracts, and the resolution of disputes.
Environmental Protection
Government enacts and enforces environmental regulations to preserve natural resources and public health.
Ensure Consumer Protection
Government sets standards and regulations to safeguard consumers from unsafe or misleading products and services.
Provide Education
Government funds and regulates education systems to improve human capital and promote equality of opportunity.
Income Redistribution
Government redistributes income to reduce inequality through welfare programs, progressive taxation, and social security.
© Hypatia.Tech. 2024 All rights reserved.