In a economy the government does not tell consumers and producers directly what they need to buy or produce, but they impose some limitations to guide production and to protect consumers and workers from unfair treatment.

They create strict rules to reduce negative externalities. ... The justifications given in favor of more government involvement in the market economy is preventing recession, reduce negative externalities, and justification on taxes (redistribution of income). Also allows more public goods to be produced.

Explanation:

The economy is important to households, consumers (these two are essentially the same thing), and firms because it determines the sorts of opportunities those groups have to make money and to buy goods and services. Households and consumers can be seen as the same thing.

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