The functions of the government and characteristics of public goods. Concept Introduction: Functions of the Government - The government performs six major functions as propagated by the economists in their theories towards growth, development, economic and social welfare. These are (1) stabilizing the economy combating effects of economic cycles and inflation/deflation/stagflation etc, (2) ensuring the equitable distribution of income and wealth in the country, (3) promotion healthy and progressive competition, (4) providing public goods and services, (5) correcting the spillovers of negative and positive externalities during market exchange and (6) providing a social and legal framework to facilitate all its functions. Public goods - Public goods are collective and social want satisfying goods whose consumption is externalized. These goods are characterized by non-rival consumption, non-exclusion and zero marginal costs of production. These are the collective social goods which cannot be defined in units and are thus indivisible. Examples- National defense, education, flood control etc.

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Chapter 5, Problem 5.2SC

To determine

The functions of the government and characteristics of public goods.

Concept Introduction:

Functions of the Government- The government performs six major functions as propagated by the economists in their theories towards growth, development, economic and social welfare. These are (1) stabilizing the economy combating effects of economic cycles and inflation/deflation/stagflation etc, (2) ensuring the equitable distribution of income and wealth in the country, (3) promotion healthy and progressive competition, (4) providing public goods and services, (5) correcting the spillovers of negative and positive externalities during market exchange and (6) providing a social and legal framework to facilitate all its functions.

Public goods- Public goods are collective and social want satisfying goods whose consumption is externalized. These goods are characterized by non-rival consumption, non-exclusion and zero marginal costs of production. These are the collective social goods which cannot be defined in units and are thus indivisible. Examples- National defense, education, flood control etc.

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