4.1 the role of the government

what is hte general role of the governemnt

• Improve the general welfare of its people

• Collects tax revenues to fund expenditures

• Provide essential services

what levels can the governemnt opeate at

local,national and internaitonal

what is local role of governemnt

• the central or federal govenrment colelcts taxes which it uses to fund local services such as rubbish colelction,street lighitng,schools ets. They are responsible for delivering gov services in a town/regional basis. eg locla helath sertice

• -they ususally recive fundign from the central govnerment and are held accountable for th equality fo goods or services provided by the voters in their area

  -colelct parking fines and build parsk and recreaitn centres etc

what is national role of governemnt

The central government makes decisions about how to achieve its macroeconomic aims using best combination of policies eg eocnomic groeht, price stability

It does this by using suitable macroeconomic policies: fiscal, monetary, supply-side & environmental policies

what is fiscal policy?

the governemnt needs ot decide hwo to raise moeny through taxation and other sources and how much of its annual budget to spend on welfare,education,defence and other items

what is monetary policy?

the government may instruct the central bank or monetary authority to make decisions about interest rates and the moeny supply in order to influence economic activity

what is supply side policies

the government might choose to change the level of the minimum wage. It might create a competition commission to regulate the actions of firms (to ensure they are not anti compeititve.) These policies are designed to promote economic growth through increasing th eporductive capacity of the eocnomy

what is internaitonal role fo governemnt

The role of the government also involves an international dimension as modern economies need to trade with other countries.An economy may be apart of a trading bloc such as the EU which promotes free trade and mobility of factors of production between memerb coutnries.There will also be soem coutnries with which it doesnt have free trade so imposition of tariffs & quotas on goods traded.

what is a trading bloc

a trading bloc is a free movement of factors of production between member countries