Government regulations can promote efficiency by encouraging safe competition, and prevent bank runs by ensuring commercial banks. Strong competition is an important factor that makes the markets run well and create more profit, but often left uncontrolled, especially after the financial crisis where it clearly shows the threats to our markets. It is also involved with an excessive risk that can suddenly lead to the economic collapse that hurts us all. Government can effectively prevent those risks by spending and regulating markets which can helps the market settle down. …show more content…
Following the Great Depression, recession periods of the contraction of the economy and the peak of unemployment were considered as the greatest of economic threats. When the danger of recession became crucial, the government has strengthened the economy by spending heavily itself or cutting taxes so that consumers would consume more, and by stimulating rapid growth in the money supply, which also encouraged more spending. By that, government regulations can amend the market crisis and make the economy more