Homework Question on Governments’ Roles
- Please write a one page paper on the role of government in the economy. Consider the contrasting views of Adam Smith/Milton Friedman and John Maynard Keynes.
- Hint: interference vs. intervention.
- NOTE: Please do not use personal pronouns (e.g. I think) – this is your paper and your views. Personal references should be left out of business writing.
Homework Answer on Governments’ Roles
It would be wrong to down play the roles that governments play in their economies. This is irrespective of the viewpoint one chooses to take in this issue. As such, people should appreciate the roles that their governments play in promoting economic prosperity. On one hand, through intervention measures, governments play critical roles in providing stable environments for conducting businesses. Governments do this through police forces or through other means that are able to guarantee security. In so doing, governments support private sectors that in return propel economic prosperity.
Apart from this, governments play critical roles in providing the legal structures for doing business in their economies. This means that other than just providing enabling environments for conducting businesses, governments go further to provide the legal structures that govern businesses in their nations. For all intents and purposes, governments’ critics should appreciate the fact that governments, more often than not, promote businesses by facilitating them.
As a way of ensuring that they facilitate businesses, governments provide various services to private sectors that no one would do. For example, governments construct roads and provide water and other facilities that promote economic prosperity. On the other hand, in terms of monetary policies, governments control money supplies in their economies. In essence, they determine the amount of money that should be in circulation in their economies.