Private enterprises are the pillars of the American economy. However, the federal government plays an important role through its policies to stimulate, promote and regulate the economy. These policies mainly focus on three areas namely labor, agriculture and business sectors.
Through business, the federal government effectively promotes economic activities. Business firms are direct or indirect beneficiaries of research grants and loans that are tailored by the federal government towards their unique interests, (Saha, & Paterson, 2008). The business operational environment is guaranteed by way of tariffs and favorable taxation laws.
Delegate your assignment to our experts and they will do the rest.
The Federal government is also actively involved in the promotion of labor through the deliberate labor laws that are made to protect workers. The government, as a result, has moved to put in place and implement worker safety, collective bargaining and minimum wage laws and regulations to promote the labor sector of the economy.
Agricultural activities as pointed out by Davis (2004), are also largely protected by the federal government through initiatives that are structured to aid the sector with income stabilization-oriented programs like through the provision of subsidized crops and farm implements.
Patterson (2013), reiterated that through the monetary policy of the federal bank is implemented by the Federal Reserve System (FRS). The FRS controls the money supply into the economy through decisions made by members of the board working in terms of fixed durations. Also known as the Federal Reserve, the government achieves its economic management objectives through the twelve regional Federal Reserve Bank branches.
As an economic management tool, the bank is responsible for determining the amount of money in circulation within the economy at any given time. To influence the amount of money circulating in the economy, the Reserve Bank can determine the amount of interest to charge on the borrowing commercial banks also known as the reserve rate; it can buy or sell securities besides controlling the amount of money to be held within the coffers of the commercial banks. This way the federal bank is the primary instrument for the government to manage the economy, thereby executing the monetary policy towards economic management.
References
Davis, C. L. (2004). International institutions and issue linkage: Building support for agricultural trade liberalization. American Political Science Review , 98 (01), 153-169.
Patterson, T. E. (2013). The American Democracy (Alternate Edition) . New York, NY: McGraw Hill.
Saha, D., & Paterson, R. G. (2008). Local government efforts to promote the “Three Es” of sustainable development survey in medium to large cities in the United States. Journal of Planning Education and Research , 28 (1), 21-37.
