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MACROECONOMICS CLASS 2020 ((4.1 The role of the government (Local level…

- - - - Has the authority to implement policies within the local geographical area
      - Undertake public activities
      - Collect taxes
      - Implement a local budget
      - The budget is spent on the welfare of the local area, providing different goods and services such as:
        
        Public libraries
        
        Internal roads
        
        Housing
        
        Public parks
        
        Hospitals
        
        Schools
    - - The public sector is an employer, producer and consumer in modern economies
        
        Employer:
        
        Main aim is to increase employment levels
        
        The goverment employs workers, managers and executives to manage it administrative departments
        
        The government can control price levels in the economy by implementing price controls and wages in the economy
        
        Increase productivity by providing training and pension schemes
        
        Producer:
        
        Public services are provided by the government
        
        These services are provided at a very low price
        
        Industries that are in the public sector are called natural monopolies
        
        the government can also own strategic industries that are important for economic development
        
        Consumer:
        
        To provide public goods the government demand goods and servies from the private sector
    - - Trade between countries is important for economic growth and economic development
      - Some countries have free-trade policies, having no restrictions on exports and imports
      - some countries place trade restriction in the form of tariffs and quotas
- - - - Economic growth refers to an increase in the real quantitiy of goods and services produced in an economy over a period of time, or an increase in real gross domestic product (GDP)
      - Every government aims to achieve sustainable, long term economic growth and increase the productive potential of the economy. When the quality and quantity of the factors of production increase, economic growth is achieved.
      - Economic growth on a PPC curve: An outward shift indicates long-term economic growth