Define economic stability function of government
Answers
Answer:
Government can bring in economic stability i.e. control fluctuation in general price level through taxes subsidies and expenditure. When there is inflation government can reduce its own expenditure. When there is deflation government can reduce taxes and give subsidies to encourage spending by the people.
Answer:
Economic stability is the absence of excessive fluctuations in the macroeconomy. An economy with fairly constant output growth and low and stable inflation would be considered economically stable.
In summary, the economic functions of a government include: Protection of private property and maintaining law and order / national defence. Raising taxes. Providing public services not provided in a free market (e.g. health care, education, street lighting)