Why Is Economy Important To Government?

The economy plays an important role in your daily life. Studying economics allows you to understand past, current and future models. You can apply them to individuals, businesses, societies, and governments, businesses.

Why is the economy important in society?

Economics provides a framework for understanding the actions and decisions of businesses, individuals, and governments. In addition, it offers a method to understand the relations in a market-driven society. Thus, it provides a way to analyze government guidelines that affect the jobs, families, and lives of citizens.

Government & Its Role In Economic Growth

Government plays an important part in the regional economy.

Why government plays a part in economic development

Social impacts. Development can have long-term optimistic effects on the economic well-being of people and places, especially low-skilled, less-educated individuals.

Spillovers. The marketplace will produce too much if private sector sellers and buyers oversee negative spillovers like pollution. They will produce too little when they oversee positive spillovers.

Existing but under-utilized capacity. If private resources or public infrastructure are left idle, a society can miss out on the chance for existing investments’ economic potential.

Political pressure. Decline or lack of progress in the economy prompts demands from voters for economic development action whether good or bad.