- Nearly every economy in the world is a mixed economy & has varying degrees of government intervention
- Governments intervention is necessary for several reasons & occurs on three distinct levels
- Local intervention
- National (macroeconomic) intervention
- International intervention
The Role of Government In A Mixed Economy
Area of Intervention
|
Examples of Intervention
|
Explanation
|
Local
|
- Local health services
- Refuse collection
- Parking fines
- Local prosecutions
- Parks & recreation
- Public services
|
- Local governments are responsible for delivering government services on a town/regional basis
- They usually receive funding from the central government & are held accountable for the quality of goods/services provided by the voters in their area
- Local government branches are often referred to as 'councils', 'federal' or 'state'
|
National
|
- Central Government
- Fiscal Policy
- Monetary Policy
- Supply-side Policy
|
- Determining the best combination of policies that will help them to meet all of their macroeconomic aims
|
International
|
- Exchange rate interventions
- Protectionism
|
- International trade is vital to economic growth in many economies
- Governments have a role to both protect domestic industry & to help it compete internationally
|