Introduction to Business Ch 9: Government in Our Economy

Our Government Main Purpose of Federal Government – Oversee the activities that involve two or more states or other countries – Constitution gives the federal government the power to regulate foreign and interstate commerce – Interstate Commerce – Business transactions involving companies in more than one state

Our Government Main Purpose of State Government – Regulate business activities within their own boundaries – Intrastate commerce – Business transactions involving companies that do business only in one state

Our Government Main Purpose of Local Government – Provide services needed for an orderly society Ex – Police and Fire Department

Government Protects How does the government protect our rights? – Police and Fire Departments – Armed Forces – Laws for safe work environment Safety standards for building, machines, and chemicals – OSHA (Occupational Safety and Health Administration)

Government Protects How does the government protect our rights? – Protect the basic human rights of workers Cannot be denied work because of you race, religion, sex, or age. Selection must be based on job requirements, training, and experience

Government Protects How does the government protect our rights? – Protect air, water, noise, and chemical pollution EPA (Environmental Protection Agency)

Government Protects How does the government protect our rights? – Contracts and Special Property Rights Patents, Copyrights, and Trademarks – Protect inventions and ideas that might profit for a company in the future

Contracts Contract – An agreement to exchange goods or services for something of value – May be written or unwritten Must include: – Agreement – An offer must be made and an acceptance must occur. – Competent Parties – Those entering into the contract must be of legal age and must be mentally competent – Consideration – Something of measureable value must be exchanged – Legality – Must be for a product or service that may be legally sold

Intellectual Property Rights Intellectual Property – Property that is purely intangible that a person cannot touch – Patents Gives that inventor the exclusive right to make, use, or sell the item for 17 years Prevents other companies from making or selling a product that your company has created.

Intellectual Property Rights Copyrights – Protects the creative works of authors, composers, and artists – Protection continues for the life of the person receiving the copyright and for 50 years after the persons death. –©–©

Intellectual Property Rights Trademark – Word, letter, or symbol associated with a specific company or product – Company names, team emblems, or label designs may be registered with the government Logo – Symbol identified throughout the world TM – Unregistered Registered Last forever

Government Regulates Public Utilities – Organization that supplies a service or product vital to all people – Water, Electric, Gas, Telephone – Privately owned but are closely regulated by the government – Companies cannot set prices as they wish

Government Regulates Preventing Unfair Business Practices – Government attempts to promote fair competition – Monopolies – When a business has control of the market for a product or service. Creates no competition and can set the prices as they wish Could provide poor quality products Antitrust Laws – Created to prevent monopolies and promote completion and fairness

Government Regulates Preventing Unfair Business Practices Antitrust Laws – Created to prevent monopolies and promote competition and fairness – Also prevents other unfair business practices such as false advertising, deceptive pricing, and misleading labeling. » Each of these hurts and reduces consumer choice

Government Assists Businesses Purchase Products and Services – Roughly 20% of all goods and services purchased in the US Hire Workers – Government is the single largest employer – About 1 out of every 9 worker is a public employee

Government Assists Businesses Government Raises Money – Revenue – Income raised Gov’t raises revenue through Taxes and Borrowing – Additional sources of revenue: » Fines, Fees, and Licenses – Taxes – Levied on earnings, value of property, and on the sale of goods and services.

Government Assists Businesses Government Raises Money – Taxes Income Taxes – Levied on the income of the individual – Largest source of revenue for the federal government Corporate Taxes – Based on the businesses profits Property Taxes – Largest source of income for Local Governments – Based on the value of your real estate – Used to pay for schools and other government services, such as police, fire, community parks, and libraries.

Government Assists Businesses Government Raises Money – Taxes Sales Tax – based on the things we buy. – Borrowing Bonds – Borrower pays back the debt plus interest. – Very little risk for the buyers of bonds