Government's Role in Business

Objectives To differentiate among the roles of government in business. To describe types of governmental activities in business. To explain the role of the legal system in business. To identify the role and impact of organized labor in business.

The government fulfills many roles and performs many activities in business.

Main Menu Introduction Government’s Role as Tax Collector The U.S. Legal System

Introduction

Promoting Economic Growth The government: increases/decreases tax rates regulates amount of money in the economy with the Federal Reserve Bank negotiates international treaties and trade agreements

Promoting Competition Acts passed to ensure competition: Sherman Antitrust Act of 1890 allows the government to break up companies with control of a market prevents monopolies Clayton Antitrust Act of 1914 passed to amend and clarify the Sherman Antitrust Act Federal Trade Commission Act of 1915 established the Federal Trade Commission

Promoting Competition Federal Trade Commission promotes fair competition prevents false/deceptive advertising

Regulating & Deregulating Industries Regulation is when the government sets strict rules affecting businesses within certain industries Deregulation is the removal or relaxation of the rules affecting businesses within certain industries Did you know? There has been a movement toward deregulation in many industries since the 1970s.

Training & Supporting Business The government: provides information and training publishes information businesses can use rate of inflation, unemployment, consumer spending provides direct loans, loan guarantees and subsidies of various types established the Small Business Administration provides low-cost loans, advice and other assistance to small businesses

Providing Trained Workers The government regulates: public schools, which offer instruction in skills relating directly to jobs in business funding for rehab and retraining of workers state and local employment agencies

Buying Industry's Products The government buys goods and services provided by private industry The government constructs and provides maintenance for transportation systems Maintaining Means of Transportation

Protecting Consumers The government creates laws and agencies protecting the eight basic rights of the consumer Examples include: Consumer Product Safety Commission Fair Packaging and Labeling Act Fair Credit Reporting Act

Protecting Employees Employees are protected through numerous government legislations designed to do the following: provide a safe work environment provide freedom from discrimination and harassment protect from unlawful termination ensure certain rights to privacy provide the right to participate in labor unions establish minimum wage

Protecting Investors Laws require corporations to disclose information affecting shareholders’ investment decisions, such as financial statements Shareholders have the right to vote on major decisions affecting the company

Protecting Investors Shareholders are entitled to receive dividend payments if the board declares dividends for the company’s stock Shareholders are prevented from gaining an advantage at the expense of other shareholders through insider trading laws

Protecting the Natural Environment Environmental Protection Agency (EPA) was established in 1970 was created to protect the natural environment in which we live stresses clean air, land and water creates laws to prevent businesses from harming the environment