USA HISTORY

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: -Political economy is an interdisciplinary branch of the social sciences. It focuses on the interrelationships among individuals, governments, and public policy. Political economists study how economic theories such as capitalism, socialism, and communism work in the real world.

Detailed explanation-3: -In every country, the government takes steps to help the economy achieve the goals of growth, full employment, and price stability. In the United States, the government influences economic activity through two approaches: monetary policy and fiscal policy.

Detailed explanation-4: -Government intervention in the economy is inevitable as certain roles and responsibilities cannot be assumed by the private sector. Governments are meant to guide and direct the pace of economic activity in the country. It also needs to ensure stable growth, high employment, and price stability.