On the Economic Function of Government in Market Economy

The economic role of the government in the market economy has the following aspects:

1. government income distribution function: refers to the government's participation in the initial distribution and redistribution of national income in a certain period of time through various policy tools, so as to realize the reasonable distribution of income among departments, regions, units and members of society, narrow the income gap and reflect social equity.

2, the government's economic stability and development function. It refers to the goal of price stability, full employment and balance of international payments by intervening and regulating the operation of the national economy, and realizing the purpose of economic development.

3. Government resource allocation function. It refers to guiding the flow of social resources such as manpower, material resources and financial resources through government economic activities, forming certain economic structures such as industrial structure and regional economic structure, optimizing resource allocation structure and improving resource utilization efficiency.

Extended data:

Market price, the price determines the allocation of resources, the relationship between supply and demand affects the price, and the market participants decide the relationship between supply and demand, so most people make decisions in the free market; The visible hand of the market, that is, the government or monopoly enterprises, is a few people making decisions. Market economy is the interaction between left and right hands, and both are indispensable.

Whoever has the right to speak and price will control the tangible hand of the market. The invisible hand of the market creates fair inequality, monopoly enterprises create unfair inequality, and the government should create fair equality.

Baidu Encyclopedia-Market Economy