Macroeconomics

1828 Words8 Pages
Nichole Plyler
Dr. Pierson
BA-2008-205
September 11, 2015
Government’s Role and Government Failure

Government’s Economic Role
Government’s Right to Coerce
In economic activities, government has the right to force individuals to do things. So if I bought and sold ducks for a business, I would want to make sure the distribution of ducks are high. If the distribution is low, my business won’t do as well in comparison if the distribution was high. With the less distribution of ducks, government is forcing me to pay more money to get my ducks. Private sectors economic activities, however, government has the right to administer involuntary transactions. So if I bought some ducks for my business and had to take a loan out from the bank
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Conflicts between two groups of people arise because one group of people have different interests. If my vice president of my duck company and I do not agree on something this will set us back on trying to get something done. If I want a waterfall in my duck pond and he wants a fountain we will but heads. I look over the company and get ideas from staff on what they would prefer and do what they want. I, pertaining to their interests or suggestions, will get me re-elected as president of the company. This decision of whether to get a fountain or waterfall falls in with special-interest effect. If I choose to get the waterfall, I will please everyone who would like to see a waterfall in the duck pond, though I will lose the people who wanted to see a fountain. If I decided I wanted neither and spent the money to build a bridge somewhere out in the country so the ducks can go under the road and not over the road saving many duck’s lives is called earmark. I stole the money from the company to build something that has no benefit to the business. This will be good news for duck lovers but not the company because I wasted a lot of money. Rent-seeking is also used. Rent-seeking is increasing prices so people can make a profit. Government uses laws and rules to gain more money from activities. For example, foreign goods are higher priced so that government can make more money off things, but this also limits competition. This limits competition because not everyone is

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