Discuss how the role of government in the area of economics has been that of an actor and a referee between consumers and the business community

Question

What will be an ideal response?

Answer 1

As an actor, the government at all levels consumes about 38 percent of the nation's total output and employs approximately 22 million individuals. State and local governments employ more than 19 million people and spend $3.3 trillion a year.
In its role as referee, rules (laws) have been set out over a period of time that may interfere in classical economic theory (marketplace economics). The laws of supply and demand may not function when competition is affected by consumer legislation such as the Fair Credit Reporting Act (FCRA), the Fair Credit Billing Act (FCBA), and the Equal Credit Opportunity Act (ECOA). These rules or laws may be based on political rather than economic foundations and decisions. Before these forms of legislation in the 1960s and 1970s, consumers were told that caveat emptor (consumer beware) was the golden rule. Today, though, government's role as referee has become prominent. Nevertheless, debate continues among economists, political scientists, and legal scholars as to what role, if any, the government should play in the relationship between consumers and business organizations.