The economic role of the Government

In every economy the work of different firms has to be coordinated. In market economy it is achieved by means of market. The debate over the role for Government in this economy is continuing. Economy, based on free enterprise is characterized by private ownership and initiative, with relative absence of government involvement. From time to time government intervention has been found necessary to ensure that economic opportunities are fair, to dampen inflation and to stimulate growth.

In the American market economy government plays a big role. It taxes, regulate, and support business. There are agencies to regulate safety, health, environment, transport, communications, trade, labour relations, and finance. Some industries - nuclear power, for example - have been regulated more closely.

U.S. Government controls inflation, limits monopoly, protect the consumer, controls the money supply. The aim is balanced budget. Government uses fiscal and monetary policies. Policies are admired at raising productivity, for abolishing poverty, increasing employment opportunity for all, providing educational opportunity for all. Its aim is to keep inflation low, maintain sound public finances and create the right climate for markets to work better.