Government's Role in Business

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

The Role of the Government Protects Economic Growths Regulator Promotes Competition Provider of Service and support Protects employees and consumers

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

Regulator - Law Maker Protect private property rights. EX: Patents EX: Set up agencies to Protect private property rights. protect workers and consumers. EX: Patents EX: FDA Trademarks EEOC Sherman Antitrust act (Monopolies) OSHA CPSC

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

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

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

Competitor U.S. Postal Service competes with UPS and Fed EX TVA provides electricity to rural areas in the South, competes with electric companies National Parks and Campgrounds compete with privately owned tourist attractions.

Provider of Service Also, the government is responsible for the social welfare system and providing Medicare and Medicaid.

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

Supporter of Business Disaster assistance - FEMA Small Business Administration – set up to provide educational materials to small business owners for success. Largest consumer of goods (U.S. made) – military and defense materials. Establish trade alliances - maintains relationships with foreign countries to ensure trade

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

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 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

Role of Consumer Deciding which businesses survive Determining prices

Business Survival Consumers keep businesses in business. How?!?!