What are the various ways that the government interacts with the economy?

Question

Involving taxes, antitrust laws, environmental issues, etc.

Answer 1

They:
tax some activities
spend money on goods and services
employ teachers, police, defence forces and other public servants
control the money supply
regulate activities (eg to protect individuals, the environment etc - criminal code, environment protection laws, anti-trust laws to limit monopoly market power)
enforce laws and regulation (to protect property rights and liberties)