The role and tasks of the state in a market economy. Tools of public policy Teacher: Surayyo Kushbakova Khakimovna

The role and tasks of the state in a market economy.

Tools of public policy

Teacher: Surayyo Kushbakova Khakimovna

Lecturer at the Department of Economic Theory

Student: Satimbayeva Mohinur Urinboy qizi

Annotation: Effective organization of foreign economic activity of the enterprise in the conditions of high rates of economic development

Key words: economy, experience, market mechanism, private entrepreneurs, price, commodity, product, tax, subsidy.

In countries based on market relations, the state plays an important role in regulating the economy. The state actively intervenes in the economy, promotes the functioning of the market mechanism, creates a competitive environment and takes measures to protect the population from negative consequences. The main purpose of state regulation of the market economy is to take measures to accelerate economic development and improve the living standards of the population by developing market relations in certain and certain directions.

Today, there is no doubt that our country should study the rich experience of the developed countries in the regulation of market economies and apply them, taking into account the specifics of our country.

       In a market economy, prices are an important tool for regulating the economy. In this case, the price is a market regulator, a regulator, which performs two main functions. First, it restricts the consumption of resources, goods and services, and second, it serves as an incentive for the production of goods (services).

The fewer consumer goods and services in the production process, the higher their prices and, accordingly, their purchases will be limited. In other words, goods and services are consumed, distributed, and redistributed according to their prices.

Fluctuations in prices, that is, increases or decreases, affect the behavior of producers. Consequently, an increase in the price of any good (service) leads to an increase in the volume of its production, the entry of new producers into the market for a particular product. In a market economy, only profitable goods (services) are produced. Goods (services) that are not profitable for the manufacturer are not produced. A drop in the price of a particular commodity indicates that its production is no longer profitable. The production of such goods is declining and the manufacturers of this industry and market are starting to leave. This means that when the price goes down and the market acts as a regulator, producers move from a non-profit or low-profit industry to a high-profit industry. Economic entities in high-profit industries or markets block the entry of others. Economic entities compete with each other in order to maintain, strengthen and improve their position in the market for specific goods.

The market mechanism encourages the production of goods and services that provide benefits to private entrepreneurs. But the social goods and services necessary for the development of society, which are used by the majority of the population, cannot be produced in the framework of private entrepreneurship. Such social goods and services include: schools, roads, fire protection, defense, national security, and more. Therefore, their production and use will have to be organized and regulated by the state.

One of the reasons for the need for a state mechanism for regulating the economy is the need to protect the population from factors that harm human health and nature. The point is that in a market economy, any entrepreneur, first of all, thinks of himself, acts in his own interests. This activity can, in some cases, harm nature or human health, contrary to the interests of the state. Such cases also require government intervention in the economy, measures to ensure that the interests of many entrepreneurs are in the common interest of all members of society.

So how does the government regulate the economy? There are various legal and economic tools at the disposal of the state, which are used depending on the specific situation and tasks.

The most important and basic means of regulating the economy is the current legislation. It should be noted once again that the rule of law in our country, that is, it is equally valid for all and must be strictly observed by all business entities. The adoption of hundreds of laws relating to economic life so far sets the legal framework for state regulation of the economy.

At the same time, the state has a number of financial, ie economic, tools at which the state can directly influence the interests of business entities. Taxes, rehabilitation and subsidies are such tools.

One of the financial instruments of state regulation of the economy is rehabilitation. It is a financial aid to state-owned enterprises, mainly in the public interest. Forgiveness or repayment of the debt of the enterprise at the expense of other entities, delay in repayment of the debt, reduction of interest on the loan, ordering the enterprise, prepayment, etc. are forms of rehabilitation.

Subsidies are funds allocated by the state for specific purposes on a non-refundable basis. Funds (subsidies) allocated for such purposes as structural restructuring (diversification) of the economy, balancing exports and imports, assistance to certain regions are important in a socially oriented market economy.

Customs duties are an important means of regulating the economy, in particular, restricting or stimulating exports and imports. As their rates increase, the amount of goods crossing the border decreases, and conversely, a decrease in the rates leads to an increase in the flow of goods.

It should also be noted that the state, through its credit policy, also influences the development of the economy.

Social protection of economically vulnerable groups of the population plays an important role in the mechanism of economic regulation of the state in order to ensure political and social stability in society. Revenues are redistributed by the state to support sectors of the national economy, including agriculture, to provide social protection to those in need. The state plays an important role in the system of income redistribution. The redistribution of income by the state is an important element of the mechanism of economic regulation.

Macroeconomic stabilization measures also play an important role in the mechanism of state regulation of the economy. It is well known that in a market economy, business activity fluctuates, and economic growth alternates with its decline. As a result, firms will break down and unemployment will rise, living standards will fall, and they will face many difficulties. With the help of the mechanism of macroeconomic stability, it is possible to limit the negative consequences of the transition from a cycle of economic growth to a crisis (decline), as well as the transition from crisis to economic growth.

Thus, it can be concluded that the state mechanism of economic regulation consists of a system of measures that affect and promote the socio-economic development of society.