According to Wikipedia government provides public services, defense, public order and safety, environmental protection, Housing and community amenities, Health, Recreation, culture and religion, Education, Social protection, and manages economic affairs. In order to provide these things it does also create money. It creates money as a medium of exchange, which derives it's value through public confidence. Government is not a productive entity and so does not produce wealth but it does provide a monetary system.
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In the past, money was generally considered to have the following four main functions, which are summed up in a rhyme found in older economics textbooks: "Money is a matter of functions four, a medium, a measure, a standard, a store." That is, money functions as a medium of exchange, a unit of account, a standard of deferred payment, and a store of value. [5] However, modern textbooks now list only three functions, that of medium of exchange, unit of account, and store of value, not considering a standard of deferred payment as a distinguished function, but rather subsuming it in the others.
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