The functions are broken up into three different categories, Allocation, Government can control and allocate how much product will go into a particular area based on need or based on economic values. 4 University of Omaha Economic Education Web: What are the Economic Functions of Government ; 5 University of Omaha Economic Education Web: What Role Should the Government Play in the Economy? Maintaining Legal and Social Framework Example: Create laws and provide courts, provide information and services to help economy function better, establish a monetary system, define and enforce property rights.. 2. 6. Economic Function of Government 1. See some examples in each of the categories and find out how you benefit from them. Is normally controlled by the government and the market to provide Based on economic needs. Through the power of taxation and expenditures, the government can affect income distribution within the country. 6 Merriam-Webster Dictionary: Socialism ; 7 Santa Clara University: Markkula Center for Applied Ethics: The Welfare of the Community Regulate Business Government regulation has four main purposes: Preventing abuses-prevents business from taking unfair advantage of workers (discrimination, etc.) It can be applied to government expense and the net acquisition of nonfinancial assets. Meaning and Definition: Externalities occur because economic agents have effects on third parties that are not parts of market transactions. 6 Economic Functions of Government . These activities are all having a direct effect on the well-being of […] To distinguish among progressive, proportional, and … - Selection from Economics: Theory and Practice, 10th Edition [Book] The Functions of Government in our Economy 2. The Classification of the Functions of Government (COFOG) was developed by the Organization for Economic Co-operation and Development and published by the United Nations Statistical Division. ADVERTISEMENTS: Economic Externalities: Meaning, Types and Effects! Examples are: factories emitting smoke and did, jet plains waking up people, or loudspeakers generating noise. 1. COFOG has three levels of detail: Divisions, Groups, and Classes. When the danger of recession appeared most serious, the government sought to strengthen the economy by spending … Protecting consumers-FDA, FCC, SEC Limiting negative externalities-limit the negative effect of the economy on citizens (pollution, traffic … Thomas Hobbes’ Leviathan describes a world of unrelenting insecurity without a government to provide the safety of law and order, protecting citizens from each other and from foreign foes.The horrors of little or no government to provide that function are on global display in the world’s many fragile states and essentially ungoverned regions. Because the government is essentially a self-financed enterprise, it has to rely on taxes to be able to provide services. In the United States, economic policy leaves most decisions to the private markets where individual choice, competition and exchange are presumed to lead to a growing economy. It refers to the government’s role in influencing the distribution of income among the population. CHAPTER 6 The Role of Government in the Macroeconomy CHAPTER OBJECTIVES To identify the major expenditures and revenues of federal, state, and local governments. For many years following the Great Depression of the 1930s, recessions—periods of slow economic growth and high unemployment often defined as two consecutive quarters of decline in the gross domestic product, or GDP—were viewed as the greatest of economic threats. Economic Functions of Government Find out what the six economic functions of government are in the United States.