Govt economy

Role of Government in regulating the economy;
The government is actively involved in economy regulation and stabilisation.
Measures that the government has put in place to regulate the economy have rendered
effective results (Maxwell, Lyon, & Hackett, (2000). The above measures that the
government has put in place to regulate the economy are discussed as follows;
In consideration to private enterprises, the government controls and regulates their
actions to ensure that the enterprises serve the expected interests of the people as a whole and
the country concerned. Government regulation is usually considered necessary mostly in
areas where a private enterprise has been granted a monopoly, as with the rail roads.
Government has set up public policy which permits private companies to make reasonable
profits; public policy also limits the ability of private companies to raise prices of their
commodities and services beyond reasonable expectations. This is unfair because the public
depends on their services. For example, in situations whereby food and drug organisations
requires quality standards of food and drug substances, in other manufacturing industries, the
government sets quality guidelines to ensure fair competition without using direct control
(Qu, & Ennew, (2005).
The government uses taxation of various commodities and services to create social or
economic benefits that presumably are not expected to occur naturally in a pure market
economy. According to a research done by Institute for Research on the Economy of
Taxation, benefits of taxation to the economy of a given country are real. Taxation is useful
in the prevention of inflation in any given country. Inflation has negative impacts to the
economy in that it will lead to the decline of an economy (Maxwell, Lyon, & Hackett, (2000).
Government regulation, for example, the regulation of drugs may prevent the
introduction of substances with harmful side effects and may also lead to a delay in the
release of lifesaving products in the market. This leads to both positive and negative Impacts
of government regulation to a country’s economy. However, the prevention of introduction of
harmful substances into the economy promotes the economy; it also inhibits the production of
the lifesaving products which will promote the economy. Here the government should not
support regulating the drugs to allow lifesaving products reach the market (Qu, & Ennew,
The government imposes tariffs on imports. This leads to a reduced number of
imports hence promoting the locally produced products. Tariffs are useful for a stable
economy; tariffs also increase government revenues which are in turn useful to the economy
of a country. Tariffs boost the local good manufacturers of a country who now face reduced
competition in their home market. The reduced competition in their home market leads to an
increase in price of the concerned commodity and service, this leads to the rise in the sales of
domestic producers. The increase in production and price causes domestic producers to hire
more workers which in turn makes consumer spending to rise. Tariffs hence lead to a stable
economy of a country and thus it’s suitable for the government to use them for a good
economy (Vogel, (2009).
The government also uses low taxation on locally produced products to promote their
local manufacturers. This is an act of regulation since through high taxation of imports; the
local producers get the chance to sell more than their foreign counterparts (Rauch, &
Schleicher, (2015). Similar to the use of tariffs, low taxation on locally produced products
leads to a stable economy, it also leads to creation of job opportunities to the unemployed
personnel. When job opportunities are high, the production of a country is high hence
increasing the amount of income earned by the local producers. Here the government tends to
play a big role in regulating foreign products and promoting their own products hence leading
to a growth in the economy of the country concerned (Rauch, & Schleicher, (2015).
Government uses Deregulation to promote its economy. Deregulation is the relaxing
of rules and regulations which have been imposed on an industry or a business. Deregulation
mostly applies in financial institutions which are directly involved in the finances of a
country (Haufler, (2013). This leads to a higher rate of production by the local producers and
promotes the working rate of customers hence improving a countries economy. Through
deregulation, the government is assumed to have regulated imports which at some extend
lower the country’s economy. Imports slow down the rate of production and hiring and hence
inhibiting the GDP growth. Through deregulation, the government’s aim of regulating the
economy is achieved (Haufler, (2013).
The Government also uses Tax Cuts and Rebates which are designed to ensure that
more of the money or income goes back into the pockets of the consumers. A larger portion
of that money is spent by the consumers at various businesses which tend to increase the
businesses’ revenues, cash flows and profits (Haufler, (2013). When consumers have more
money, this means that their businesses have the resources to procure capital, grow, expand
and improve technology. All this actions are aimed at increasing productivity which in turn
grows the economy. Tax Cuts and Rebates allow customers to stimulate the economy
themselves through imbuing the economy with more money. Through this the government
achieves a stable economy (Haufler, (2013).
Qu, & Ennew, (2005). Developing a market orientation in a transitional economy: The role of
government regulation and ownership structure. Journal of Public Policy &
Marketing, 24(1), 82-89.
Maxwell, Lyon, & Hackett, (2000). Self-regulation and social welfare: The
political economy of corporate environmentalism. The Journal of Law and
Economics, 43(2), 583-618.
Haufler, (2013). A public role for the private sector: Industry self-regulation in a global
economy. Carnegie Endowment.
Vogel, (2009). Trading up: Consumer and environmental regulation in a global economy.
Harvard University Press.
Rauch, & Schleicher, (2015). Like uber, but for local government law: The future of
local regulation of the sharing economy. Ohio St. LJ, 76, 901.

Place new order. It's free, fast and safe

550 words

Our customers say

Customer Avatar
Jeff Curtis
USA, Student

"I'm fully satisfied with the essay I've just received. When I read it, I felt like it was exactly what I wanted to say, but couldn’t find the necessary words. Thank you!"

Customer Avatar
Ian McGregor
UK, Student

"I don’t know what I would do without your assistance! With your help, I met my deadline just in time and the work was very professional. I will be back in several days with another assignment!"

Customer Avatar
Shannon Williams
Canada, Student

"It was the perfect experience! I enjoyed working with my writer, he delivered my work on time and followed all the guidelines about the referencing and contents."

  • 5-paragraph Essay
  • Admission Essay
  • Annotated Bibliography
  • Argumentative Essay
  • Article Review
  • Assignment
  • Biography
  • Book/Movie Review
  • Business Plan
  • Case Study
  • Cause and Effect Essay
  • Classification Essay
  • Comparison Essay
  • Coursework
  • Creative Writing
  • Critical Thinking/Review
  • Deductive Essay
  • Definition Essay
  • Essay (Any Type)
  • Exploratory Essay
  • Expository Essay
  • Informal Essay
  • Literature Essay
  • Multiple Choice Question
  • Narrative Essay
  • Personal Essay
  • Persuasive Essay
  • Powerpoint Presentation
  • Reflective Writing
  • Research Essay
  • Response Essay
  • Scholarship Essay
  • Term Paper
We use cookies to provide you with the best possible experience. By using this website you are accepting the use of cookies mentioned in our Privacy Policy.