The Role of the
Government
Brainstorm!

What should the main role(s) of the
government be?
Let’s see how well you remember last
semester…
Four Economic Roles of the
Government




1.
2.
3.
4.
Regulate Business
Provide public goods
Promote citizen’s economic well being
Stabilize the Economy
Regulate Business
1.A. Prevent abuses
 EEOC Equal Employment Opportunity
Commission
 OSHA Occupational Safety Health Administration
B. Protect Consumers
 FDA Food & Drug Administration
 CPSC Consumer Product Safety Commission
 FTC Federal Trade Commission
 SEC Security & Exchange Commission
 Federally insure banks
Regulate Business (Cont.)

C. Limiting Negative Externalities




E.P.A. Environmental Protection Agency
NRC Nuclear Regulatory Commission
Fights traffic congestion, soil erosion, and pollution
D. Promote competition


S.E.C.
antitrust regulation to stop creation of monopolies
Provide Public goods






road maintenance
public schools
courts
law enforcement
national defense
U.S. postal service
Must be available to all people whether it is
used or not.
Privatization of public goods

Some companies have replaced the
government agencies such as:

UPS and Fed Ex

Garbage companies
Promote Economic Well Being


A. Improve standard of living through
programs like Medicare, social security
B. Redistributing Income
Welfare programs help the poor
Stabilize the Economy


A. Raise interest rates to fight inflation
B. Lower interest rates to stimulate growth
In order to provide these things:

The Government must use a tax system!

What is the best level/format of taxation?