Government plays a role in regulating the economy from "summary" of The Making of Economic Society by Robert L. Heilbroner,William Milberg
The economy is not a self-sustaining, self-regulating entity. Left to itself, it has a tendency to fluctuate wildly, creating booms and busts that can wreak havoc on people's lives. In order to prevent such chaos, governments around the world have taken on the responsibility of regulating their economies. This involves a range of activities, from setting interest rates to controlling the money supply to imposing taxes and tariffs. By regulating the economy, governments can help ensure stability and growth. For example, when the economy is in danger of overheating, leading to inflation and asset bubbles, the government can raise interest rates to cool things down. On the other hand, when the economy is in danger of stagnating, the government can lower interest rates to stimulate spending and investment. Governments also play a crucial role in redistributing wealth and resources within a society. Through progressive taxation and social welfare programs, they can help ensure that wealth is more evenly distri...
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