1. Maintaining Legal and Social Framework
Example:
Create laws and provide courts
Provide information and services to help the economy function better
Establish a monetary system
Define & enforce property rights

2. Providing Public Goods and Services
Example:
Provide goods & services that markets are unable or unwilling to provide
Such as:
National defense
National park system

3. Maintaining Competition
Example:
Create and enforce antitrust laws
Regulate natural monopolies

4. Redistributing Income
Example:
Higher income tax rates for rich than for poor
Provide Social Security
Aid dependent children with programs such as Medicare and Medicaid

5. Correcting for Externalities
Example:
Money to encourage positive externalities
Such as education
Taxes to reduce negative externalities
Such as environmental pollution

6. Stabilizing the Economy
Example:
Use government budgets and/or the money supply to promote economic growth, control inflation, & reduce unemployment