What are the five major reasons for government involvement in a market

What are the five major reasons for government involvement in a market economy?

What will be an ideal response?

ANSWER

Provide the legal, monetary and social framework necessary for markets to operate. Insure that markets operate in a competitive manner. Redistribute income and wealth in a more desired (equitable) fashion. Guarantee a more efficient use of resources when there are benefit and cost externalities. Stabilize the overall level of economic activity to counteract undesirable levels of price inflation and unemployment.