The Government’s Role in a Market Economy

In a market economy, the majority of a nation’s land, factories, and other economic resources are privately owned by businesses or individuals. Even though the government has little or no direct involvement, it still has an influence in improving the market’s economy by creating antitrust laws, providing a stable fiscal and monetary environment, and preserving political stability and property rights.
One role the government has in the economy is to enforce antitrust laws. Antitrust laws are enforced in order to encourage the development of industries with as many competitors as possible. In other words, antitrust laws restrict one company from creating a monopoly; to keep a company from controlling the supply of a product and ultimately the price. Therefore, if there is more competition in a single industry, prices on those products will be lower in order to compete for and supply consumer demand.
Recently, Microsoft was brought to court because the U.S. Government b...