The Role of the Government

Topics: European Union, Economics, Inflation Pages: 2 (574 words) Published: January 26, 2015
The Role of the Government
One of the government roles is to create an environment in which businesses thrive. This is because businesses create wealth for the nation as a whole and the people who live there. Above the Maltese Government there is the European Government and since Malta makes part of the European Union it is affected by the policies and laws that the European Government states. The EU protects the internal market by allowing businesses within the EU to trade across borders without any controls or restrictions. The EU tries to make sure that all businesses compete fairly with each other and promotes competition laws to keep prices low for consumers within the EU. Businesses in the EU also benefit from product standardization which means that most products can be sold all over Europe without needing to be adapted or changed. The Maltese government makes laws that apply to everyone but also has to abide by EU directives on agreed areas, such as employment rights, product safety and competition. The government tries to attract businesses to locate in Malta to increase employment prospects. The government aims to create a stable economy with continued growth so that new entrepreneurs are encouraged to start and grow businesses in Malta. How does the economy works? When consumers buy goods they spend money. Firms use this money to hire labour and pay wages. These workers then buy more goods and so on. The more this happens the greater number of people employed and everyone becomes richer. The Government gains tax from the people employed and pays out fewer benefits because unemployment is lower. There are mainly four ways how to keep the economy strong and stable. Steady Economic Growth

Economic growth is measured by putting a monetary value on all the goods and services produced it the country. This is called Gross Domestic Product. It can be calculated by expenditure which mean much money everyone spends each year, by income how much money everyone...
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