Claims that government intervention and regulation in business will promote ethics have become a common argument. Licensing:Gives the business people authority/permission to carry out business activities legally Fixing quotes :quantitative restrictions on goods that should be … Indirect tax: to discourage production of demerit goods and others services that produce negative externalities. The regulation of business activities like import and exports, foreign exchange and etc., through Imports and Exports (Control) Act, COFEPOSA, FERA and FEMA. The government takes keen interest in training people to understand the business activities through Kenya Business Training Institute (KBTI) iii. Government regulation on marketing and advertising: Every business in the United States must comply with truth-in-advertising laws regulated by the Federal Trade Commission (FTC), as well as comply … In the recent years government across the globe have passes legislations to control business activities from harming the environment. A reasonable workforce temperature is maintained for workers. To ensure that wealth is equitably distributed. To prevent strategic technology from falling into the hands of rival states. This basic statement assumes that it is possible to arrive at a collective judgment as to the desirable income distribution. This includes high (possibly excessive) amounts of spending on persuasive advertising and marketing. De-merit goods: A demerit good is a good that government or society considers being harmful or bad for people. The government enforces control for the good of consumers, workers, local residents and the community. i. Government receives a great deal of its tax income from businesses. In this age of globalization, firms with immense wealth accumulatio… The classical economic case against monopoly is that, Price is higher and output is lower under monopoly  than in a competitive market, This causes a net economic welfare loss of both consumer and producer surplus. To protect workers from dangerous equipment. Negative Externalities: Consumers and producers may fail to take into account the effects of their actions on third-parties. STABILISATION ROLE: The government intervenes in the market to ensure there is steady growth. It encloses the details of the wage rate; working hours, deductions and other necessary details concerning working conditions. The existence of monopoly power is often thought to create the potential for market failure and a need for intervention to correct for some of the welfare consequences of monopoly power. The allocative function refers to how much of the government’s budget will be allocated to particular projects. Consumer Credit Act: According to this act, consumers should be handed a copy of the credit agreement and should be aware of the interest rates, length of loan while taking a loan. Reasons why governments intervene in the affairs of business. When people refuse to contribute to the cost of providing a public good on the grounds that once it is provided no one can be barred from using it. To internalize the social costs of businesses. There are several reasons why the State might intervene in business affairs and regulate businesses. Flat M2 3.All businesses are under the government’s control. The recent business bailouts are the start of government control of businesses. Rent seeking behaviour by the monopolist might add to the standard costs of monopoly. Even so, there almost no regulation on the books that isn't helping some businesses, and usually the big ones. Apart from that the Government has 4 distinctive role: The Imports and Experts (Control) Act, 1947 amended from time to time empowers the government to prohibit or control imports and exports in the public interest. Many would consider the United States to be a market economy, despite its heavy levels of government control and regulation. ALLOCATIVE ROLE: The government must determine how some resources are allocated. For example, selling of guns, explosive and dangerous drugs are illegal in many countries. Why government control business activity Production of certain goods and services: Governments can pass laws to restrict and ban certain dangerous goods such as: Monopoly Power: Markets may fail to control the abuses of monopoly power. There two major forms of government in Zimbabwe: The local governments in the form of councils either urban or rural, There are other laws which apply by virtue of treaties, SADC regulations, the African Union and United Nations. To implement legislation, the government generally creates special agencies to monitor and control certain aspects of business activity. Answers. Companies were made to regulate business. Allocating funds gleaned from taxes also allows the government to create jobs or public venues. aerosol cans that use CFCs which has been banned because of their damaging effect on the ozone layer. Proper hygienic conditions and washing facilities are provided. While there are many highly specialized types of government regulation on businesses in the U.S., some broad categories apply across most if not all areas of business. Cyprus, Copyright © 2020 UniAssignment.com | Powered by Brandconn Digital. A state-owned enterprise (SOE) or government-owned enterprise (GOE) is a business enterprise where the government or state has significant control through full, majority, or significant minority ownership. Government control over business activity Business activity produces goods and services which people wish to buy. By the way, government control of business has a name. Third-parties are individuals, organisations, or communities indirectly benefiting or suffering as a result of the actions of consumers and producers attempting to pursue their own self interest. Market failure occurs when freely-functioning markets, fail to deliver an efficient allocation of resources. During the first one hundred years these trade laws were in effect, the British did little to enforce them. Here are the 10 key steps that lobbying businesses will follow to bend government to their will. It concerns the use of budget deficits or surpluses to add to or subtract from aggregate demand in the economy, with the intention of influencing the level of output and unemployment and the rate of inflation in the economy. If anything goes wrong, chat with us using the chat feature at the bottom right of this screen. Business cannot fire the workers because they have joined a trade union or for being pregnant. Government regulation is much maligned in business circles. Large business might take the advantage of their size and exploit consumers, employees and even use unfair tactics to overcome competition from small businesses. Control Activities: Control activities are the actions established through policies and procedures that help ensure that management’s directives to mitigate risks to the achievement of objectives are carried out. By 1764, however, England had incurred significant war debts, an… Income from businesses a loss of economic and social welfare proper notice before dismissing worker! Holds an Honours in Accountancy degree from the southern colonies, dominated commerce in that.. 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