Question

Ali is working with a company that makes custom-designed shoes for its customers. The customers have accepted the product concept, but Ali finds that his company is unable to proceed because of a lack of funds. His company has decided to obtain a low-cost loan from a government bank to boost the business. Which functional role of the government will help Ali’s company through this process? Ali’s company is being helped by the role of the government.

Answer 1

The functional role being used by the government to help Ali's company is;

Redistribution of income and resources

Step-by-step explanation:

The government using the three arms, namely; legislature, judiciary and executive perform various functions to ensure that it's citizens live and operate in a certain way. There are different activities that need government input o ensure efficiency. Some examples are; social activities, economic activities and political activities. Some of the major functions of government are as follows;

1. Defend and preserve the country's territorial integrity: the government has a duty to defend it's borders against external aggression.

2. Preserve order: order has to be preserved in a country to minimize chaos. The government using the constitution as a tool for preserving and maintaining order.

3. Redistribution of income and resources: the government can enforce certain policies that tend to redistribute income and resources from the wealthy to economically marginalized groups in the society. This can be done by imposing higher taxes on the rich while at the same time imposing little or no tax on the poor. The government can also provide subsidies to goods and services meant for the poor or even support small businesses by providing for cheaper loans with very low interest. An example is Ali's company that utilized a low-cost loan to boost his business. In this way the government is playing the role of redistribution of income and resources.