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Allocation function: this is the process by which the total tax is divided between public goods and services and by the mix of private goods is chosen.
Redistribution function: refers to the adjustment of wealth and income to ensure conformity with what the society considers fair and just.
Stabilization function: refers to the use of budgetary policy as a means of maintaining high employment, reasonable degree of price stability and appropriate policy of economic growth with an allowance of the effects on trade on balance of payment.
Regulatory role of the government: it enacts and enforces laws contract. This ensures that market trades and private exchanges that take place smoothly. It also enforces the system of law and justice and regulates individuals behaviour.
Faimus answered the question on February 25, 2019 at 19:20
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