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Government intervention into the economy

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Assess the effects of government intervention into the economy on the managerial decision-making process.

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This posting gives you a step-by-step explanation of how the government stabilizes the economy. The response also contains the sources used.

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There are several effects of government intervention into the economy on managerial decision making. If fiscal measures are used and there is reduction in taxes, managers can allocate more funds for investment. Greater liquidity also means that dividends can be paid to shareholders or the capacity for production can be increased. If the government uses fiscal policy and increases spending, the managers can target the extra demand for products and services. For example, if the government spends on building new bridges, the managers can vie for contracts for construction or sell related ...

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