Question

please identify and briefly describe the main economic functions of government. What function do you think is the most controversial? Explain why.

Answer 1

Answer: the main economic functions of government are :

• resource allocation : government allocates the resources among different sectors of the economy and maintain a balance between them for their growth and development
• distribution : government look after the distribution of income among the various classes of the economy. government also manages the distribution of goods and services among people in the society
• regulate markets : government makes different types of rules to regulate the labor market, capital market and money market and also keep checks on the monopoly in the economy.
• maintain economic stability: government through its taxes and spending maintains the economic stability. government changes its taxation policy and spending according to the fluctuation in the economic during boom and recession.
• maintain public - private relationship: government helps in maintaining public private relationship which is important for the development of an economy.
• making policies: government make policies and laws for the benefit of the society and to reduce economic problems such as poverty, unemployment, illiteracy and poor health etc.
• social security programs for social welfare: government makes various social security programs for different sections of the society for their betterment.

the most controversial function of government is making policies and social security benefit programs because sometimes the actual beneficiaries does not get benefits and sometimes government fails to execute the programs properly.