ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The government (1) provides the legal and social framework within which the economy operates, (2) maintains competition in the marketplace, (3) provides public goods and services, (4) redistributes income, (5) cor-rects for externalities, and (6) takes certain actions to stabilize the economy.

Detailed explanation-2: -An economy is a system of inter-related production and consumption activities that ultimately determine the allocation of resources within a group. The production and consumption of goods and services as a whole fulfill the needs of those living and operating within it.

Detailed explanation-3: -The role of government in the public sector can be enumerated as below: 1. Welfare of the people: The focus of the public sector is always on public welfare, unlike the private sector which focusses on maximizing profits. Services like railways, post office, are run by the government to ease public life.

Detailed explanation-4: -Mixed economic systems are not laissez-faire systems, because the government is involved in planning the use of some resources and can exert control over businesses in the private sector. Governments may seek to redistribute wealth by taxing the private sector and by using funds from taxes to promote social objectives.