Introduction to Business, The Role of Government in Business Slide 1 of 54 The Role of Government In Business

Introduction to Business, The Role of Government in Business Slide 2 of 54 Learning Objectives After completing this chapter, you’ll be able to: 1.Describe 1.Describe ways government protects business. 2.Name 2.Name some of the services the government provides. 3.Explain 3.Explain why the government collects taxes. 4.State 4.State the ways the government promotes business.

Introduction to Business, The Role of Government in Business Slide 3 of 54 Why It’s Important Government rules promote and regulate the actions of business. The laws influence the production, selling, and pricing of goods and services.

Introduction to Business, The Role of Government in Business Slide 4 of 54 How Government Affects Business To promote economic growth, local, state, and national governments pass laws to both promote and regulate business.

Introduction to Business, The Role of Government in Business Slide 5 of 54 Government as Regulator The three different levels of government are: Federal State Local

Introduction to Business, The Role of Government in Business Slide 6 of 54 Government as Regulator The federal government focuses on business that takes place across all states, or interstate commerce. State governments focus on intrastate commerce, or business within each state.

Introduction to Business, The Role of Government in Business Slide 7 of 54 Government as Regulator The four aspects of the economy that the government regulates are: 1.Protecting competition 2.Protecting business agreements 3.Protecting creative properties 4.Regulating the production process

Introduction to Business, The Role of Government in Business Slide 8 of 54 Protecting Competition An oligopoly is when a small number of companies control the market without actually forming a trust. A company that controls an entire industry is called a monopoly.

Introduction to Business, The Role of Government in Business Slide 9 of 54 Protecting Competition Rival companies can form a monopoly by banding together into a trust and agreeing not to compete with each other. Antitrust laws allow the government to break up monopolies, regulate them, or take them over.

Introduction to Business, The Role of Government in Business Slide 10 of 54 Protecting Competition The government created the Federal Trade Commission (FTC) to regulate interstate trade. Its job includes setting standards for honest advertising.

Introduction to Business, The Role of Government in Business Slide 11 of 54 One of the most basic ways the government protects business is by enforcing contracts. A contract is a legal agreement between two or more parties to conduct business. A contract can be written, verbal, or even done with a handshake. A contract protects all the parties that agree to it. Protecting Business Agreements

Introduction to Business, The Role of Government in Business Slide 12 of 54 Protecting Business Agreements When one party fails to live up to the terms of a contract it is called a breach of contract.

Introduction to Business, The Role of Government in Business Slide 13 of 54 Protecting Creative Properties A copyright gives artists the sole right to own their creations, such as plays, photos, music, paintings, and books. A patent gives you the sole right to own an invention.

Introduction to Business, The Role of Government in Business Slide 14 of 54 Protecting Creative Properties A trademark is a brand name, trade name, trade characteristic, or a combination of these that is given legal protection by the federal government.

Introduction to Business, The Role of Government in Business Slide 15 of 54 Regulating the Production Process The government tries to stop industrial pollutants with regulations. These regulations limit the amount of wastes that factories can discharge into the environment.

Introduction to Business, The Role of Government in Business Slide 16 of 54 Providing Public Services The government is the single largest provider of services in the country.

Introduction to Business, The Role of Government in Business Slide 17 of 54 Government as Provider People pay for government-provided goods and services through taxes. The idea behind taxes is to pay for public goods and services and to share the cost among many people.

Introduction to Business, The Role of Government in Business Slide 18 of 54 Figure 11.2 WORKING FOR TAXES During an average eight-hour workday, nearly three hours of your workday goes to paying federal, state, and local taxes. This comparative chart shows where people work the most and least for taxes. Name some ways in which the government spends the money for projects or services on your community. Source: Tax Foundation

Introduction to Business, The Role of Government in Business Slide 19 of 54 Government as Provider Government spending decisions directly affect how resources are allocated. Government spending influences the distribution of income, or the way in which income is allocated among families, individuals, or other designated groups in the economy.

Introduction to Business, The Role of Government in Business Slide 20 of 54 Providing Public Services Many of the services the government provides are necessary for the protection of the public. Other services promote social welfare. To pay for services, the government has to raise money. The money the government takes in is called revenue.

Introduction to Business, The Role of Government in Business Slide 21 of 54 Providing Public Services Federal income tax is used to pay for highways, defense, and social security. Local taxes are used to pay for streets, libraries, and parks. All three levels of government fund public education.

Introduction to Business, The Role of Government in Business Slide 22 of 54 Graphic Organizer PUBLIC TRANSIT PUBLIC TRANSIT GOVERNMENTSERVICESGOVERNMENTSERVICES Services the Government Provides Graphic Organizer PARKS AND RECREATION PARKS AND RECREATION COURT SYSTEM COURT SYSTEM PUBLIC EDUCATION PUBLIC EDUCATION WELFARE SUBSIDIES WELFARE SUBSIDIES POSTAL SERVICES POSTAL SERVICES PUBLIC SAFETY PUBLIC SAFETY

Introduction to Business, The Role of Government in Business Slide 23 of 54 Providing Work The government is the single largest employer in the country. The federal government employs over three million people. For people temporarily out of work, the government provides unemployment insurance. The government provides welfare benefits and job training programs. Social Security provides insurance by taking a certain amount of money out of your paycheck and setting it aside for your future retirement.

Introduction to Business, The Role of Government in Business Slide 24 of 54 Assisting Business The government is the single largest consumer of goods and services. The government buys most of its equipment directly from businesses or has it specially made, such as military aircraft and fire trucks. The Small Business Administration (SBA) offers different kinds of loans to aspiring small-business owners. The government also lends money to big businesses that are in financial trouble.

Introduction to Business, The Role of Government in Business Slide 25 of 54 Assisting Business To protect American businesses from unfair foreign competition, the government sets up trade barriers. Subsidies are payments the government gives to businesses to make up for their losses. To encourage socially responsible behavior, the government offers businesses reductions in taxes, or tax incentives.

Introduction to Business, The Role of Government in Business Slide 26 of 54 Assisting Business Tax breaks are given to companies that conserve energy or use alternate sources of fuel. Loans and tax breaks are offered to businesses that do community development.