Economic Regulation – How State Regulates Economy?

Economic Regulation

Economic regulations are the laws and rules established by the state of a country. These rules and regulations are supposed to ensure security and stability to the economy of a country. Laws established by governments make the security of the property of people living in the country. These regulations are also helpful to secure foreign investment as well. A regulatory economy is a tool with the help of which a state can control the systematic development of the country.

Economic Regulation – How State Regulates Economy?

There are a number of policies through which a government regulates the economy. The crucial among those policies is the monetary policy. Monetary policies are made by central banks in order to regulate the supply of currency into the economy.  Such policies also affect the interest rates which has an influence on the overall economic activity at both local and international levels.

Other economic regulations also help to ensure justice. For example, the regulation on the wages given to the labour force makes it sure that people get incomes in order to fulfil everyday needs. Also, these regulations have a crucial impact on the distribution of resources in a country. Taxation is another regulatory that is collected by the government in order to produce revenues for public spending.

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