government and mixed economy

government and mixed economy

 

The role of the government in a mixed economy.

Creates framework of rules and regulations.

The government establishes rules and regulations to ensure a (fair play) among producers and consumers in order to stamp out dishonesty, stealing, cheating.

Ensures equitable distribution of income

The wide gap of income between the rich and the poor cause hatred and jealousy among citizens. To solve this problem, the government adopt a progressive tax system and provide more benefits like scholarships, education and health ship at almost 0 market price to the peasant.

The government subsidizes the economy.

Government has the responsibility of stabilizing prizes in order to control inflation, unemployment and providing security and peace in the economy. The government does this using fiscal and monetary policies.

Provision of public goods

Government also acts n a mixed economy to provide those activities or goods which are not profitable to investors but very essential to the welfare of the community government also intervenes again to provide those activities which if left in the hands of the private individuals, the common man or an average consumer will be unable to pay for it e.g. health facilities.

Supplement and modify the price system

Government also intervenes in the mixed economy in other to provide those goods which are not attractive to investors because they are not yielding any profit. The prizes of goods are also influence by the government through taxation

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