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Government's role in business
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Describe The Roles of Government In The Present Business Environment
In the present business environment governments have the power to change and make laws, having a major role and influence on the business environment.
There are three levels of government; federal, state and local.
The federal government has power over such areas as; company law, income tax, trade etc. State government has power over pollution, price controls, state courts etc. and local government has power over rates, building approvals and zoning. Through zoning the local government can decide where businesses are located, or how many similar businesses should be built in a particular area.
The power of the government can have direct or indirect influences on the business environment, encouraging or forcing businesses to comply. The federal government has the greatest effect over the macroeconomic business environment through the making of policies. The government has a number of economic objectives. They aim to have consistent economic growth, low rates of inflation, a sound international trading situation and low unemployment. To meet these objectives the government must place policies such as fiscal, monetary, trade and income policies.
Fiscal policy is the deliberate action of the government to change its levels of income and expenditure, through the annual budget. By budgeting for a deficit or surplus, the government will contract or expand the economy. e.g If the government needed to cut unemployment they would budget for a deficit so more money is injected and less money is taken from the economy by less taxes and higher expenditure raising employment.
Monetary policy can also raise the level of economic activity. It controls the availability of money by influencing the level of interest rates.
Lowering interest rates encourages people to spend and borrow while higher interest rates encourages people to save and not borrow. By lowering interest rates the government encourages spending thus increasing the level of economic activity. Income policies influence wage outcomes by negotiating with the unions and the employers and putting arguments before the industrial relations
We often wonder about the importance of government. Is it necessary? Does it really benefit society? The answer is yes. Many countries have diverse forms of government such as totalitarian, monarchy, theocracy, and much more. The United States of America specifically runs a democratic type of government. A democratic government gives power to the people. Citizens over the age of eighteen are allowed to elect leaders based on their individual opinions through voting rights. The main purpose of the American government is, to protect people’s inalienable rights to life, liberty, property, and the pursuit of happiness as our Founding Fathers intended.
1970s and 80s when they realized that the New Deal ideas that were passed in an
Governing a large group of people is not a simple task and therefore there is no set way that it can or should be done. Instead, there are suggestions as to what a government should do for citizens and the practices that should be prohibited to protect the rights of each citizen. Broadly speaking, we must consider every person that resides in a state as a citizen, regardless of legal status. This is to protect all from suspicion and discriminatory practices that do not further liberty, democracy or justice.
What major technology change has had the greatest impact on the quality of your life?
...t. This is known as “trickle-down” economics which is “an economic idea which states that decreasing marginal and capital gains - especially for corporations, investors and entrepreneurs - can stimulate production in the overall economy. According to trickle-down theory proponents, this stimulus leads to economic growth and wealth creation that benefits everyone, not just those who pay the lower tax rates.”
The reduction of government role in the economy will affect fiscal policy by decreasing deficit spending a...
Government effects my life everyday in a vast variety of ways. From the quality of the milk that I drink in the morning, to the license and Insurance I need to drive my vehicle to school and work. Government also effects the taxes that are deducted from my salary. The government uses this money to protect consumers and provide services for the public amongst many other things.
The lower savings rate meant a higher consumption rate, which stimulates more spending, more income, and thus more spending, in a self-feeding process known as the multiplier effect.
Everyone has their own political leaning and that leaning comes from one’s opinion about the Government. Peoples’ opinions are formed by what the parties say they will and will not do, the amounts they want spend and what they want to save. In macroeconomic terms, what the government spends is known as fiscal policy. Fiscal policy is the use of taxation and government spending for the purposes of stimulating or slowing down growth in an economy. Fiscal policy can be used for expansionary reasons, which is aimed at growing the economy and increasing employment, or contractionary which is intended to slow the growth of an economy. Expansionary fiscal policy features increased government spending and decreases in the tax rates as where contractionary policy focuses on lowering government spending and increasing tax rates. It must be understood that fiscal policy is meant to help the economy, although some negative results may arise.
An increase in government spending or a reduction in net taxes is always aimed at increasing aggregate output (Y). The main aim is to stimulate the economy but this may lead to many problem such as inflations, budget deficit because of needed debt to finance the deficit. Before finding out which is the better options for stimulation of any economy we need to first be clear with the concept of multiplier.
The other method is Deflationary fiscal policy this involves decreasing AD therefore the government will cut their spending and or increase taxes. Higher taxes will reduce consumer spending. This will lead to an improvement in the government’s budget deficit.
The appropriate role of government in the economy consists of six major functions of interventions in the markets economy. Governments provide the legal and social framework, maintain competition, provide public goods and services, national defense, income and social welfare, correct for externalities, and stabilize the economy. The government also provides polices that help support the functioning of markets and policies to correct situations when the market fails. As well as, guiding the overall pace of economic activity, attempting to maintain steady growth, high levels of employment, and price stability. By applying the fiscal policy which adjusts spending and tax rates or monetary policy which manage the money supply and control the use of credit, it can slow down or speed up the economy's rate of growth in the process, affecting the level of prices and employment to increase or decrease.
Substantive and Procedural Law – Substantive laws are the social rights and duties of people, and procedural law are guidelines through which government bodies or courts deal with breaches in substantive law. E.g. substantive law would state that hitting someone with a car and driving off is a crime, while procedural law would define how the courts could try and sentence in the case.
The world of business has undergone radical and dramatic changes in the last decade changes that present extraordinary challenges for the contemporary manager. A manager is an organizational member who is responsible for planning, organizing, leading, and controlling the activities of the organization so that the goals can be achieved. According to a widely referenced study by Henry Mintzberg, managers serve three primary roles: interpersonal, informational, and decision-making. Management is process of administrating and coordinating resources effectively and efficiently in an effort to achieve the goals of the organization.
As citizens of the United States, and as people living under a democracy, the government has certain responsibilities to us. We are guaranteed union, justice, tranquility, defense, welfare, and liberty. These rights are all very important to the well being of our country and the states that exist in it. I feel that there are three that are a little more important than the others.