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Questions and Answers
What is one example of an indirect control used by the government to regulate the economy?
What is one example of an indirect control used by the government to regulate the economy?
- High import duties (correct)
- Restrictions on intra-corporate investments
- Licensing public enterprises
- Setting profit margin ceilings
Which of the following best describes the main characteristic of direct controls?
Which of the following best describes the main characteristic of direct controls?
- They involve a fixed system of licensing without discretion.
- They have a discretionary nature. (correct)
- They encourage free market operations.
- They are primarily enforced through monetary policies.
What regulatory measure may be used to manage the relationship between enterprises?
What regulatory measure may be used to manage the relationship between enterprises?
- Incentive-based taxation
- Profit margin adjustments
- Export-oriented industry promotion
- Sole selling agent appointment (correct)
How has governmental regulation of the economy changed since the late 1980s?
How has governmental regulation of the economy changed since the late 1980s?
Which of the following is an example of a direct control in business regulation?
Which of the following is an example of a direct control in business regulation?
Flashcards
Government Regulation of Business
Government Regulation of Business
Government intervention in the economy to influence the conduct of businesses, from entry to final results.
Direct Controls
Direct Controls
Government directly imposes rules and regulations to control businesses, such as setting profit ceilings.
Indirect Controls
Indirect Controls
Government uses fiscal and monetary policies to influence business behavior, such as tax incentives or interest rates.
Deregulation Trend
Deregulation Trend
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Impact of Deregulation
Impact of Deregulation
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Study Notes
Government Regulation of Business
- Governments play a crucial role in supporting private firms from inception to completion.
- Sectors like small-scale, public, and cooperative sectors may have reserved industries.
- Licensing systems are used for regulation.
- Businesses' results can be regulated, setting limits on profit margins and dividends.
- Governments can control relationships between enterprises.
- Intra-corporate investments, interlocking directorships, and sole selling agent appointments are examples of regulated areas.
Types of Government Controls
- Economic regulation is broadly divided into direct and indirect controls.
- Indirect controls use financial incentives and penalties.
- High import duties discourage imports, while incentives support export-oriented industries.
- Direct controls involve administrative or physical limitations. Direct controls are usually discretionary.
Deregulation Trend
- Developing nations have historically heavily regulated businesses.
- Deregulation gained traction in the late 1980s.
- Deregulation has significantly altered the competitive landscape and accelerated globalization.
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Description
This quiz explores the various roles governments play in regulating business operations, including economic regulations, licensing systems, and controls over enterprise relationships. It also discusses trends in deregulation, particularly in developing nations. Test your knowledge on government policies affecting businesses today!
