Answer to Question #279517 in Microeconomics for Lindaa

Question

discuss with the use of examples, whether the government should directly provide certain goods and services in an economy

Answer 1

There is a need for government to avail certain services and products to the citizens. For instance, the security of a nation cannot be managed by the private sector. The government is needed to recruit and train police officers and armies to ensure that the citizens are protected from both internal and external security threats. To guarantee equal access and availability of essential products like water and electricity, the government may take the role of providing water and electricity. Also, certain industries such as rail and air transport require a huge capital investment that the private sector cannot manage. In such cases, the government will build and establish rail networks and airports to facilitate railway and air transport.