Answer to Question #103717 in Microeconomics for Carol yonela

Question #103717
What role does the government play under a market economy
1
Expert's answer
2020-02-25T10:17:28-0500
  1. Efficiency: The government should attempt to correct market failures like monopoly and excessive pollution to ensure efficient functioning of the economic system.
  2. Infrastructure: The government should provide an integrated infrastructure that enhance, directly or indirectly, output levels or efficiency in production.
  3. Equity: promote equity use taxes and spending to redistribute income toward particular groups.
  4. Economic Growth or Stability: rely upon taxes, expenditures and monetary regulation to foster macroeconomic growth and stability to reduce unemployment and inflation while encouraging economic growth.

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