Business Environment
SECTION
C
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Chapter
8
THE ROLE OF
GOVERNMENT IN AN
ECONOMY
omy
In this chapter we discuss responsibilities of government, including environmental protection, zoning and conservation, and external
(international) boundaries. We also look at laws to protect consumers, consumer organizations and standards. We consider the ways in which governments interact with business activity in the private and public sectors, including subsidies and price controls. We look at the features, purposes and uses of direct and indirect taxation, progressive taxation, tax impact, tax incidence and the tax burden, and also tax havens. Finally, we look at how government agencies help commerce and industry and consider the nature of government social services, including those that aim to reduce crime and poverty and improve infrastructure. Responsibilities of government
OBJECTIVE 1
1
2
3
4
5
To outline the responsibilities of government in an economy. Security of the state
Consumer protection and welfare of citizens
Job security and severance pay to workers
Environmental protection
Maintenance of a safe environment for investors
In all walks of the social life of a community the government plays the most important role. The government is the protector of its people through various forms of security provided by the police, fire services, armed forces and the coastguard. The government of a country, even if the communities within the country are primitive or tribal in character, makes innumerable laws for the general welfare and benefit of all its people. The government, then, can be said to provide defence for its people as well as the administration of justice.
One of the most important roles of any government should be to try to maintain social or cultural equilibrium, and economic and political fair play.
C
The business environment 273
03-BusinessforCSEC-SectionC-cpp.indd 273
09/02/2011 11:46
Chapter
8
THE ROLE OF
GOVERNMENT IN AN
ECONOMY
omy
In this chapter we discuss responsibilities of government, including environmental protection, zoning and conservation, and external
(international) boundaries. We also look at laws to protect consumers, consumer organizations and standards. We consider the ways in which governments interact with business activity in the private and public sectors, including subsidies and price controls. We look at the features, purposes and uses of direct and indirect taxation, progressive taxation, tax impact, tax incidence and the tax burden, and also tax havens. Finally, we look at how government agencies help commerce and industry and consider the nature of government social services, including those that aim to reduce crime and poverty and improve infrastructure. Responsibilities of government
OBJECTIVE 1
1
2
3
4
5
To outline the responsibilities of government in an economy. Security of the state
Consumer protection and welfare of citizens
Job security and severance pay to workers
Environmental protection
Maintenance of a safe environment for investors
In all walks of the social life of a community the government plays the most important role. The government is the protector of its people through various forms of security provided by the police, fire services, armed forces and the coastguard. The government of a country, even if the communities within the country are primitive or tribal in character, makes innumerable laws for the general welfare and benefit of all its people. The government, then, can be said to provide defence for its people as well as the administration of justice.
One of the most important roles of any government should be to try to maintain social or cultural equilibrium, and economic and political fair play.