Explain the role the government can play through the budget in influencing allocation of resources. Should i have to write only allocation function of government budget or the whole objectives of government budget if it is asked in a 6 mark
Dear student,
The given question asks for only the allocative function of the government.
The following is the explanation for this:
Under the allocative function the government allocates the resources between the private sector and the public sector. There are certain goods that cannot be provided that the private sector cannot provide through the market mechanism. Such goods are provided by the government. Moreover, the goods provided by the private sector cannot be afforded by everybody. Who only those who can pay for the cost of the goods can avail their benefits. However, there are certain goods that are required by all for the overall welfare and well-being. So, the government provides for these goods.
Keeping all such factors in mind the government must efficiently allocate the resources between the public goods and private goods.
The given question asks for only the allocative function of the government.
The following is the explanation for this:
Under the allocative function the government allocates the resources between the private sector and the public sector. There are certain goods that cannot be provided that the private sector cannot provide through the market mechanism. Such goods are provided by the government. Moreover, the goods provided by the private sector cannot be afforded by everybody. Who only those who can pay for the cost of the goods can avail their benefits. However, there are certain goods that are required by all for the overall welfare and well-being. So, the government provides for these goods.
Keeping all such factors in mind the government must efficiently allocate the resources between the public goods and private goods.