Question

In your opinion, what is the correct role of the government in an economy?

Answer 1

Answer:

Governments provide the legal and social framework, maintain competition, provide public goods and services, redistribute income, correct for externalities, and stabilize the economy. ... Over time, as our society and economy have changed, government activities within each of these functions have expanded.

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Answer 2

Answer:

The U.S. government influences economic growth and stability through the use of fiscal policy (manipulating tax rates and spending programs) and monetary policy (manipulating the amount of money in circulation). ... This stimulates demand and encourages economic growth. Cuts in government spending have the opposite effect.