Economics

Economics
Name
Institution
Author Note

Economics
How the Government Encourages Production
The government may encourage production by making the factors of production cheaper and more accessible in the marketplace. It can do this by formulating friendly trade policies, giving incentives, offering grants and loans and lowering interest rates (Burda & Wyplosz, 2013). Simplifying regulations guiding land ownership may enable producers to acquire land for production easily. Besides, grants and loan programs given directly to producers are one way to promote production. Offering tax incentives to producers, lowers production costs, thus motivating them to produce more. Finally, reducing interest rates on loans encourage access to capital, which is a vital factor of production.
Steps the Government Can take to Promote Entrepreneurship and market participation
The government can take several steps to promote entrepreneurship and consumer market participation. Such measures may entail increasing scope for capital by availing loans and grants to startup businesses, promoting cooperation between the private sector and researchers to improve public-private partnerships, developing proper IT tools for entrepreneurs and reducing regulatory burdens exerted on entrepreneurs (Burda & Wyplosz, 2013). The government can reduce regulatory burdens on entrepreneurs by granting them, permits quickly and making use of digital technology to process regulatory requirements. Also, the government can help entrepreneurs to access networks through international trade transmissions and enterprise forums.

All these steps are geared towards supporting the growth of small businesses started by entrepreneurs.
Centrally Planned and Free Market Economies
There are many economies in the world, which share some common characteristics. Some examples of such economies are the purely planned and free market economies. In a purely planned economic system, a dominant power which is usually the state controls a large portion of all the economic activity (Burda & Wyplosz, 2013). In this type of economy, one person or a group of people control what is produced, and all enterprises work together to produce commodities that are planned and distributed by the state.
Conversely, in a free market economy, the entire market system is regulated by market participants and the law of demand and supply (Burda & Wyplosz, 2013). In this economic system, the government does not control any economic segments or resources. Hence, individuals are free to decide on what to produce, what to work for and the means of obtaining the things they need. Therefore a primary difference between the two economic systems depends on who dictates what is to be produced.

Reference
Burda, M., & Wyplosz, C. (2013). Macroeconomics: A European text. Oxford University Press.