Three broad functions of government:
the allocative function, which refers to the role of government in correcting market failure and
achieving amore efficient allocation of resources
the distributive function, which refers to the steps taken by government to achieve a more
equitable or...
Three broad functions of government:
the allocative function, which refers to the role of government in correcting market failure and
achieving a more efficient allocation of resources
the distributive function, which refers to the steps taken by government to achieve a more
equitable or socially acceptable distribution of income than that generated by market forces
the stabilisation function, which refers to the measures taken by government to promote
macroeconomic stability (eg full employment, price stability and balance of payments
stability)
3. 2 Reference: Prescribed book PG 286
How government intervenes
public provision of goods and services
through its role as a market participant.
government spending is a powerful tool
taxation
regulation.
4. 3 Reference: Prescribed book PG 288
Nationalisation means that the government takes over the ownership or management of private
enterprise (with or without compensation). In other words nationalisation is the transfer of ownership
from private enterprise to government.
5. 4 Reference: Prescribed book PG 372
An expansionary fiscal policy is applied when the government (in the person of the Minister of
Finance) increases government spending (G) and/or reduces taxes (T). This is illustrated by a
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