Chapter 4
Policies of
The
State
Policy and Government


Strong Governmental Role exists in industrialized
society
Privatization (newer trend): firms run by the state
given to private industry to run
Constraints that Limit Policy Options

Gross Domestic Product (GDP): total amount of all
economic transactions in a state; how rich or poor
a country is

Poorer countries have more constraints (example:
military spending limits, lack of infrastructure;
amount of spending in education)
Constraints
 PPP per capital GDP: per capital GDP adjusted to
consider fluctuations in currencies; also a market of
wealth of a country