powerpoint presentation

2. A discussion on the
importance of the role
of Government in the
market economy

3. OUTLINE
• DEFINE MARKET ECONOMY
• PROVIDE A LEGAL SYSTEM
• PUBLIC GOODS AND SERVICES
• REDISTRIBUTION OF INCOME
• MAINTAIN COMPETITION
• CONCLUSION
• LIST OF SOURCES
• QUESTIONS

4. MARKET ECONOMY
• According to Parkin (2012),
Individuals own all factors of
production, and make own
decisions.
• Decision making-process
is, thus, said to be
decentralized.

5. Provide a legal system
• ENCOURAGES INDIVIDUALS TO:
• Take care of their properties
• Invest in their properties.

6. Enforcing law and order
• Illegalise production and
consumption of illegal
goods and services

7. Public goods and Services
• Those that private firms
cannot provide.
• Provide for free or at lower
affordable costs.
• Government can pay a
private firm to produce public
goods.

8. Redistribution of income
Market economies face income inequality
• Tax collections
• Main source of government revenue

9. Maintain competition
• Regulating monopiolies
• Prevent monopolistic
firms from setting higher
prices
• Promote competition

10. CONCLUSION
• Limited, but very important role to
play
• Promote equity
• Prevent market failure
• Stabilize the economy.

11. List of Sources
• Abedian, I. & Standish, B. (1992).
Economic growth South Africa. Cape
Town: Oxford University press.
• Parkin, M. (2012). Economics: Global and
Southern African Perspectives. Cape
Town: Pearson Education (pty) Ltd.
• Barro, J. (2008) . Macroeconomics: A
modern Aproach: Macmillan Inc.

12. QUESTION?