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The Role of Government


The Role of Government

National Champions are industries that are or have the potential to be world leaders from that specific country.

Strategic industries are important for the economic development and safety of the country

Natural monopolies are industries where a single firm can produce at a lower average cost than two or more industries because of the existence of significate economies of scale and they also could be where competition is wasteful or unnecessary example multiple electricity suppliers

Free international trade is the exchange of goods and services between countries without any restrictions and too much tariff

Trade blocs are the exchange of goods and services between countries without any restrictions between themselves

Role of Government at an international level



They could be using tariffs, quotas, and others to promote or reduce international trade. They could also use trade blocs that promote free international trade. This trade could allow the economy of the country better as they could allow for more jobs if MNC’s come into their countries or the national firms could be increasing their production in a plan to export their products.



Government as an employer


Governments may produce products that are of paramount importance like national water supply and others. These usually make them a natural monopoly. These natural monopolies combined with the social responsibility of the government make sure that the economy will not underproduce socially positive goods and make sure socially bad goods are controlled.

The government could also make sure that national champions and key industries do well so that their economy would not be destroyed and to make sure that their economy gets better.

The government also makes essential products like public goods.



The government and the private sector.



The government could allow the private sector to provide their services when needed for example the government could allow the firms to tender for a job to build roads in certain areas. They also could be taking part in privatization or taking private firms into the public sector.