![]() ![]() In general, a government's active role in responding to and influencing the economic circumstances of a country is for the purpose of preserving and furthering the economic interests of the general public. ![]() Businesses operate without the government dictating what they will produce. The government may decide to regulate some aspects of economic activity in order to engineer economic growth or prevent negative economic conditions in the future. In a market economy, most of the economic decisions are made by individuals. In the U.S., the Federal Reserve System directs the country's monetary policy.There is little supervision over businesses in a market economy, and consumers are expected. ![]() To ensure strong economic growth, there are two main ways that the federal government may respond to economic activity: fiscal policy and monetary policy. Governments play a minor role in the direction of economic activity through taxes and regulation.But the impacts of banning affirmative action are far wider. In reality, most governments fall somewhere within that range rather than at either pole. colleges have selective admissions, where race-conscious admissions can make a difference in who gets in. For those in political power, having a track record of economic growth is often an important consideration (especially if they are in a position of seeking re-election). Governments that leave more economic decisions to citizens emphasize freedom, imposing few restrictions on how much (or little) money people make and how they make it.In the U.S., government policy has always had a large amount of influence on economic growth and the creation of new business entities.Market Economy: The individuals make economic decisions. Economic conditions often inform the policy changes that governments elect to enact. An economy in which only the government makes economic decisions is a a. Centrally Planned Economy: A centrally planned economy is an economic system in which the state or government makes economic decisions rather than the interaction between consumers and businesses. Command Economy: The state decide what to produce, how to produce it, who it should be produced for. ![]()
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