The Role of Government in Business Chapter 11 The Role of Government in Business

Describe ways government regulates business. Learning Objectives Describe ways government regulates business. 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.

Government as Regulator Goal is to protect both business and the public from unfair, unsafe, and unethical business practices FED – focus on interstate commerce, or business that takes place across all states STATE - focus on intrastate commerce, or business within each state LOCAL - focus on cities/counties

4 FUNCTIONS OF GOV’T REGULUATION 1 2 3 4

Protecting Competition Oligopoly - is when a small number of companies control the market Monopoly – when one company controls an entire industry Why is this bad for the consumer?? Price/Selection Rival companies can form a monopoly by banding together into a trust and agreeing not to compete with each other

Protecting Competition Antitrust laws - allow the gov’t to 1) break up monopolies, 2) regulate them, or 3) take them over (Ex: Microsoft case) Federal Trade Commission (FTC) regulates interstate trade (false claims about products)

????????????????????????? This level of government focuses on intrastate commerce. State government

Protecting Business Agreements Contract - is a legal agreement between two or more parties to conduct business - can be written, verbal, or a handshake. breach of contract - when one party fails to live up to the terms of a contract

Protecting Creative Properties Copyright - gives artists the sole right to own their creations, such as plays, photos, music, paintings, and books Patent gives one the right to own an invention Trademark is a brand name, trade name, trade characteristic, or a combination of these that is given legal protection by the federal government (logos, symbols, etc)

Regulating the Production Process Government tries to stop industrial waste through regulations. Federal/State/Local governments all try to limit the amount of waste that factories can discharge into the environment.

?????????????????????? What are the four ways government regulates business? Protect competition Protect business agreements Protect creative properties Regulate production process

HOMEWORK Rd. Pgs. 185-189 Questions 1-3 on Pg. 189

Learning Objectives Explain why the government collects taxes. Name 3 services the government provides for our economy. 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.

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

Government as Provider Revenue – money gov’t takes in (taxes) Federal income tax - used to pay for highways, defense, and social security Local taxes are used to pay for streets, libraries, and parks State Taxes / Sales Taxes All 3 levels of gov fund public education

Services the Government Provides Graphic Organizer Graphic Organizer Services the Government Provides PUBLIC SAFETY PUBLIC TRANSIT COURT SYSTEM GOVERNMENT SERVICES PARKS AND RECREATION PUBLIC EDUCATION POSTAL SERVICES WELFARE SUBSIDIES

Providing Work & Aiding Citizens The FED gov employs over 3 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.

Assisting Business The government single largest consumer of G&S buys most of its equipment directly from businesses or has it specially made, such as military aircraft and fire trucks sets up trade barriers to protect USA business

Assisting Business Subsidies are payments the government gives to businesses to make up for their losses Tax incentives - gov offers businesses reductions in taxes to be socially responsible 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.

??????????????????????? What are the three ways government provides for society? Providing public services Providing work Assisting business

HOMEWORK Chapter Review on Pg. 190 Questions 2-5