1. Government's Role
in Business

2. 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.

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

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

5. Introduction

6. 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

7. 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

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

9. 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.

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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