Role of the government

The major role of the government is to provide legal framework within which all economic transactions can occur

The roles of the government include ;

• The government produces public goods and services and affects production decision of private firms through regulations, taxes and subsidies
• The government may subsidize production of certain private goods.
• The government may regulate businesses in an attempt to protect workers, consumers and the environment to prevent uncompetitive practices and discrimination
• Equally the government buys goods and services in order to provide national defense, maintain infrastructure, security, health services and research among other services.

Functions of the government in public policy objectives

• Allocative function-this is the provision of goods and services or the process by which total revenue use is divided between private and public goods and by which means the public good is chosen.
• Redistribution function this function involves adjustment in income and wealth to what society considers fair and just
• Stabilization function-use of budgetary policy as a means of maintaining high employment, price stability, economic growth and external balance
• Regulatory function- this role enacts and enforces law of contracts, this ensures market trade and private transactions take place smoothly.

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