The Impact Of Government On The Economy Essay

742 Words Jul 30th, 2015 3 Pages
EXAMINE THE ROLE OF GOVERNMENT IN THE ECONOMY.
Our American Government has an important role in the Economy, whether it is doing it as its best or not, we cannot deny how important it is. “Economics, as Mr. B said in the lecture, cannot be understood apart from politics and vice versa”, so in order to understand how our economy works we have to learn the role our government has. In this essay I would like to examine the role of government in economy, contrasting the two terms from the balancing act: Efficiency and Equity. As a feedback it is important to mention that we have a mixed economy and that the U.S. is characterized by having a public sector, a government sector and a private sector. First of all, government plays as regulator of private business. It is politics that allow or restrict private property, unless is an illegal market, it has to be government regulated. One reason for this, is to ensure competition. By having competition more consumers will benefit by having more choices, it will maintain good prices and will avoid monopolies. There are some bureaucracies trying to ensure competition in markets for example the Federal Trait commission, the anti-trust division, the federal communication commission, etc. Another reason as why the government plays as regulator of private business is to deal with externalities, these are unintended consequences of production that have consequences for society, for example air pollution, water pollution, etc. Bringing back…

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