The government plays a critical role in a market economy, for it establishes the strategies of providing key services, redistribution, regulation and subdivision. Concerning provision, the government plays the role of providing public goods and services such as national security, which is imperative for a stable economy. Within the American economy for example, the Lorenz curve provided information towards the existence of unequal distribution of income. By carrying out redistribution therefore, the government will be making distribution of income and other important resources less unequal (Gregory et al, 2004). By carrying out regulation within a market economy, the government will be setting grounds for a free and fair market, which is the foundation upon which a stable economy operates. Over and above, I harbor the perception that the government should intervene in a market economic system, for such a strategy guarantees that, the ideal monetary and fiscal policies are in place to prevent the market from fluctuations.

What are the proprietorship business organizations and corporations? Which one do you think is more important for the American economy? As a macro economic policy maker, would you support the growth in the number of proprietorship businesses or corporations? Why?

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Proprietorship business organizations is the simplest and most common form of business ownership pro... View the full answer