Give five reasons why Government… | Economics

Question 1 Report

Give five reasons why Government participates in business enterprise.

Answer

Answer Details

Government takes part in business enterprise for the following reasons:

To provide essential goods and services: utilities such as water, electricity and public transport that the citizens need but the private sector may neglect.
To provide services too costly for private investors: projects requiring very heavy capital, such as railways, refineries and steel plants, are often beyond private means.
To prevent exploitation by private monopolies: government provides some services itself to ensure fair prices and protect consumers.
To create employment: public enterprises provide jobs and help reduce unemployment.
To generate revenue: profitable state enterprises add to government income.

(Other valid reasons: to ensure even development across regions, and to control strategic industries important to national security.)

Give five reasons why Government participates in business enterprise.