economics of public sector 4

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Why Government Acts Government acts to correct economic instability, market failures, inequality/extreme poverty and to promote growth Musgrave’s three branches of government - Stabilization - Allocation - Distribution Equity and Efficiency Government Failures - Limited information - Limited control over private market responses - Limited control over bureaucracy - Limited imposed by political process

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Why Government ActsGovernment acts to correct economic instability, market failures, inequality/extreme poverty and to promote growthMusgraves three branches of government- Stabilization- Allocation- DistributionEquity and EfficiencyGovernment Failures- Limited information- Limited control over private market responses- Limited control over bureaucracy- Limited imposed by political process