Unit 6 - Role of Government In Business - Notesdes

Unit 6: The Role of

Government in Our Economy

Mr. ElsesserIntroduction to Business

BRAINSTORM:Answer this question…“Try to identify some of the ways in which government can regulate business?”

The Concept Government as a Regulator

Governments regulate by:Fostering economic successCreating Laws that protect: Competition Business Agreements and Creative Properties Production Processes

Regulation takes place on the Federal (country), State and Local Government (cities, townships, towns) levels.

How Governments can Regulate Business

Interstate Commerce: Business that takes place

between states. Overseen by state government

Can you identify any examples of Interstate Commerce?

4 Ways in Which Governments can Regulate Business

1. Protecting Competition: Ensuring that consumer choice is not

limited. Monopoly:

When a company controls an industry or is the only one to offer a product or service.

Created by establishing a TRUST: A group of companies that band together to

form a monopoly and cut out competition. Oligopoly:

When a small number of companies control an industry.

4 Ways in Which Governments can Regulate Business

1. Protecting Competition: Antitrust Laws:

Laws that allow the federal government to break up monopolies.

Overseen by Federal Trade Commission (FTC)

4 Ways in Which Governments can Regulate Business

2. Protecting Business Agreements: Contract: A legally enforceable agreement between

two or more parties. Can be written, verbal or handshake

Breach of Contract: When one party falls to live up to the terms

of a contract. What kind of contract is easiest to

prove a breach of contract occurred?

3. Protecting Creative Properties: Copyright:

The legal right of artists to own their creations. Can last up to 70 years until after the original creator’s

death. Patent:

Legal grant for the sole right to own an invention. Lasts for 20 years after inventor filed application with US

Patent and Trademark Office. Trademark:

A name, symbol, or characteristic that identifies a product. Cannot be copied if registered appropriately.

Can you identify an example of each?

4 Ways in Which Governments can Regulate Business

4. Regulating the Production Process:

The government regulates the production process by passing laws that protect the environment and workers. The Food and Drug Administration

(FDA) regulated the manufacture and sale of drugs in the United States.

Section Review1.What is the difference between interstate and

intrastate commerce?1.Interstate commerce is business between

states, overseen by the federal government. Intrastate commerce is business within a state, overseen by state or local governments.

2.What are the ways that the government can deal with a monopoly?1.It can break it up, regulate it, or take it over.

3.What kinds of property are protected by copyrights?1.Musical compositions, song lyrics, books,

movies, plays and photographs.

BRAINSTORM:How does the American government serve as a provider for its citizens?

Government’s Role in SocietyOne of governments main roles is to provide goods and services for citizens—using tax monies.They provide:

Key services to the public. Goods: Highways, bridges

Services: Water Treatment Plants, National Defense

Provided with Revenue: Income that governments get from all sources.

Some goods provided through Privatization: When a business offers a public good or service.

Government’s Role in SocietyOne of governments main roles is to provide goods and services for citizens—using tax monies.They provide:

Distributing income. Ensures the well-being of citizens Transfer payments ensure money to

people at times of need. Examples: Unemployment, Social

Security, Veteran’s Benefits, FEMA

Government’s Role in SocietyOne of governments main roles is to provide goods and services for citizens—using tax monies.They provide:

Providing jobs. More than 3 million people work for

the federal government State and local governments employ

millions of people.

Government’s Role in SocietyOne of governments main roles is to provide goods and services for citizens—using tax monies.They provide:

Incentives to business and people. Small Business Admin (SBA) encourages

development of small businesses and offer advice/loans.

Subsides: Monetary grants given to producers or

consumers to encourage certain behaviors—benefitting public.

How Government Is FundedTax(es):

An amount of money people/businesses pay governments to help run the nation, state, county, city or town.

Each level of government collects taxes for different kinds of services—sharing the cost among many people.

Tax Incentive: A temporary reduction or elimination of a tax that

is meant to encourage or discourage an activity. Promotes specific economic or social objectives.

Resources are allocated in “best ways” and gov’t spending affects the distribution of income.

Section Review1.What are some services that the

government provides for the public?1.Defense, education, parks, museums,

libraries, roads, police, fire department, and courts.

2.How is government funded?1.Through taxes.

3.How does the government allocate resources? 1.The government decides how to spend

tax revenues by determining which projects are priorities.