Government is the strongest agent among all the agents in an economy with its fiscal and regulation power. In the capitalist economies, the government intervention is not appreciated because the intervention to the economy might cause inefficiency. However, the capitalist market mechanism might create inefficiency that might require intervention. Thus, the government intervention to the markets is not desired but sometimes necessary.
The economy management consists of two parts in almost every economy: monetary policy and fiscal policies. Central banks are responsible for developing monetary policies to respond the changes in the money markets while governments can develop fiscal
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