Market Systems and Government By: Ben Quick

The Role of Government Provide public goods and services Redistribute income Protect property rights Resolve market failures Regulator

1. Provide Public Goods and Services - Roads - Schools - Nuclear Weapons Services - Public Safety - Medicare - Social Security

2. Redistribute Income Through taxing and spending policies the government can move money from one individual to another. Welfare, Medicare, and Medicaid are the most obvious examples

3. Protect Property Rights Enforce contracts and private ownership of the factors of production Enforce laws that make sure the economy is efficient and fair

4. Resolve Market Failures Protect against big business and monopoly advantage Ensure fair competition and consumer choice

5. Regulator The government regulates business to protect citizens against harm/fraud Examples: - Banking – protects against bank failures (FDIC) - Auto Industry - safety

5. Regulator (Cont.) Regulation and deregulation (removing existing regulations) have different effects on producers and consumers Regulation increases the cost of producing goods/services, but provides consumers with protection Deregulation cuts the costs for the producers, but reduces the protection of the consumer

5. Regulator (cont.) Examples - Food and Drug Administration - Environmental Protection Agency - Bank Regulations - Federal Aviation Administration

Questions?