Identify and describe three instruments of public policy. Explain the broad effect of policy instruments.

What will be an ideal response?

Students can identify and describe law, services, money, taxes, supplying credit, loan guarantees, government insurance of activities, suasion. Policy instruments influence the economy and society be distributing burdens and benefits. Most fundamental benefits are rights; largely legal and participatory, but with growth of large entitlement programs that distribute cash benefits to citizens, rights may now be said to include those programs as well. Government distributes goods and services both directly and indirectly. Services can be delivered through private organization and through other levels of government. A huge amount of money flows through the public sector where it is shuffled around and given to different people. The net effect is not as great as might be expected considering the amount of money, but that effect is to make distribution of income and wealth somewhat more equal than would be the case through the market alone. Governments distribute burdens as well as benefits through programs such as taxation and conscription. Taxes are distributed broadly across the population with the effect most citizens paying some form of taxes. Thus, everyone in society benefits from the activities of government and everyone pays for the activities of government.