Government regulation

The economic functions of government tend to be viewed primarily as either public spending programs or revenue-generating activities that are used to pay for public spending. Another area in which the government has a profound influence on the economy is regulation. Regulation like other government activities, can be analyzed within both a positive and a normative framework. In general, a case for government regulation can be made in instances in which the private sector of …

…group of people to produce a benefit for another group. This transfer can be affected with direct taxation and government spending or through regulation. In light of the conceptual link between taxation and regulation, the government's influence on the economy extends far beyond the amount of public spending that takes place. Regulation has an equivalent effect on the economy and so needs to be considered just as seriously when evaluating the economic activities of government.