The Role of Governmentin Business

Chapter 11

pp. 160-173

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Learning ObjectivesLearning ObjectivesAfter completing this chapter, you’ll be able to:After completing this chapter, you’ll be able to:

1.1. Describe Describe ways government protects business.

2.2. NameName some of the services the government provides.

3.3. ExplainExplain why the government collects taxes.

4.4. StateState the ways the government promotes business.

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Why It’s ImportantWhy It’s Important

• Government rules promote and regulate the actions of business.

• The laws influence the production, selling, and pricing of goods and services.

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How Government Affects How Government Affects BusinessBusiness

1. To promote economic growth, local, state, and national governments _________________ to both promote and regulate business.

pass laws

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Government as RegulatorGovernment as Regulator

2. The three different levels of government are:

– Federal– State– Local

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Government as RegulatorGovernment as Regulator

3. The ______________________ focuses on business that takes place across all states, or _____________________

4. State governments focus on _____________________, or business ___________________.

federal government

interstate commerce.

intrastate commercewithin the state

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Government as RegulatorGovernment as Regulator

5. The four aspects of the economy that the government regulates are:

• Protecting competition

• Protecting business agreements

• Protecting creative properties

• Regulating the production process

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Figure11.1 GOVERNMENT REGULATIONS

Government regulates these four aspects of the economy.

Which one do you think has side effects on our environment?

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Protecting CompetitionProtecting Competition

6. An ________________ is when a ________________________________ control the market without actually forming a trust.

7. A company that controls an ________________is called a _______________.

oligopolysmall number of companies

entire industrymonopoly

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Protecting CompetitionProtecting Competition

8. Rival companies can form a monopoly ______________________________ and agreeing not to compete with each other.

9. ______________ allow the government to ___________________________

_______________________________.

by banding together into a trust

Antitrust laws

break up monopolies, regulate them, or take them over

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Protecting CompetitionProtecting Competition

10.The government created the Federal Trade Commission (FTC) __________________________

11. Its job includes ________________ for _________________.

to regulate interstate trade

setting standardshonest advertising

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The merger between America Online (AOL) and Time Warner is the largest media merger in history. The new company was worth $110 billion, after the merger.

continued

Limits on Competition

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The Federal Trade Commission was concerned that the new AOL-Time Warner would limit competition. To avoid this, they required Time Warner to open its broadband pipes to competing Internet service providers.

continued

Limits on Competition

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What are the advantages of the AOL and Time Warner merger?

Analyze

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Protecting Business AgreementsProtecting Business Agreements

12. One of the most basic ways the government protects business is by _________________.

13. A ___________ is a legal agreement between ________________________

________________________

enforcing contracts

contracttwo or more parties to conduct business

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Protecting Business AgreementsProtecting Business Agreements14. A contract can be _________________

_____________________________.

15. A contract protects __________________________________

16. When one party fails to live up to the terms of a contract it is called a ____________________

written, verbal oreven done with a handshake.

all the parties that agree to it.

breach of contract.

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Assisting BusinessAssisting Business Protecting Protecting Creative PropertiesCreative Properties

17.A ______________ gives artists the sole right to own their creations, such as plays, photos, music, paintings, and books.

18. A ___________ gives you the sole right to own an ______________.

copyright

patentinvention

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Protecting Creative Properties Protecting Creative Properties

19. A _____________ is a ______________________________

______________, or a combination of these that is given legal protection by the federal government.

trademarkbrand name, trade name, trade characteristic

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Regulating the Production Regulating the Production ProcessProcess

20. The government tries to stop ________________________________.

21. These regulations ________________ of wastes that factories can discharge into the environment.

industrial pollutants with regulations

limit the amount

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Fast Review

1. What is the difference between interstate and intrastate commerce?

2. What are the ways the government can deal with a monopoly?

Interstate commerce is business between states overseen by the federal gov. Intrastate is business within a state and overseen by state gov.

Break it up, regulate it or take it over

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Fast Review

3. What kinds of properties are protected by copyrights?

3. Explain the role of the legal system in business.

Artistic creations like books, movies, music, plays and photos

The government passes laws to protect competition, protect business agreements, protect creative properties and regulate the production process.

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Government as ProviderGovernment as Provider

22. People pay for government-provided goods and services ________________.

23. The idea behind taxes is to ________________ goods and services and to ____________________________.

through taxes.

pay for publicshare the cost among many people

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Figure11.2 WORKING FOR TAXES

During an average eight-hour workday, nearly three hours of your workday goes to paying federal, state, and local taxes. This comparative chart shows where people work the most and least for taxes.Name some ways in which the government spends the money for projects or services on your community.

Source: Tax Foundation

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Government as ProviderGovernment as Provider

24.Government spending decisions directly affect how _____________________.

25. Government spending

____________________________, or the way in which income is allocated among families, individuals, or other designated groups in the economy.

resources are allocated

influences the distribution of income

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Providing Public ServicesProviding Public Services

26.The ____________ is the single _______________ of services in the country.

27. Many of the services the government provides are necessary for the _________________________

28. Other services promote ____________.

governmentlargest provider

protection of the public.

social welfare

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Providing Public ServicesProviding Public Services29.The government also provides

______________________________________________________________

30. To pay for services, the government has to ______________.

31. The money the government takes in is called ____________.

public education, roads, courts, post offices and many more.

raise money

revenue

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Providing Public ServicesProviding Public Services

32.Federal income tax is used to _____________________________

_____________________. 33.Local taxes are used to

______________________________

34. All three levels of government fund _________________.

pay for highways, defense, and social security

pay for streets, libraries, and parks

public education

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Graphic Organizer

PUBLICTRANSITPUBLIC

TRANSIT

GOVERNMENTGOVERNMENTSERVICESSERVICES

GOVERNMENTGOVERNMENTSERVICESSERVICES

Services the Government ProvidesServices the Government Provides

Graphic OrganizerGraphic Organizer

PARKS ANDRECREATIONPARKS AND

RECREATION

COURTSYSTEMCOURTSYSTEM

PUBLICEDUCATION

PUBLICEDUCATION

WELFARESUBSIDIESWELFARESUBSIDIES

POSTALSERVICESPOSTAL

SERVICES

PUBLICSAFETYPUBLICSAFETY

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Providing WorkProviding Work

35. The government is the single __________________ in the country.

36. The federal government employs over ___________________.

largest employer

three million people

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Providing WorkProviding Work

37. For people ___________________, the government provides _______________________.

38. It also provides _________________________________.

temporarily out of work

unemployment insurance

welfare benefits and job training programs.

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Assisting BusinessAssisting Business

39. The government is the single ____________________ of goods and services.

40. The government buys most of its ______________________________ or has it specially made, such as military aircraft and fire trucks.

largest consumer

equipment directly from businesses

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Assisting BusinessAssisting Business41. The ____________________________ (SBA)

offers different kinds of loans to aspiring small-business owners

42.The government also ______________________________ that are in financial trouble.

43.To protect American businesses from ______________________, the government sets up _____________________.

.

small business administration

lends money to big businesses

unfair foreign competitiontrade barriers

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Assisting BusinessAssisting Business

44.____________ are payments the government gives to businesses to ______________________________.

45.To encourage ____________________, the government offers businesses ________________________________.

Subsidies

make up for their losses

socially responsible behavior

reduction in taxes or tax incentives

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Assisting BusinessAssisting Business

46. _______________ are given to companies that conserve energy or use alternate sources of fuel.

47. ________________________ are offered to businesses that do community development.

Tax breaks

Loans and tax breaks

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Fast Review

1. What are some services the government provides for the public?

2. Name different types of government workers.

Defense, education, parks, museums, libraries, roads, police, fire department, mail, trash collection

public officials, courthouse clerks, mail carriers, military personnel, teachers, bus drivers, police, fire fighters, trash collectors.

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Fast Review

3. Describe the types of activities performed by government in business.The government buys goods and services from business. It lends money to aspiring small-business owners through the Small Business Administration and lends money to big businesses in financial trouble. It protects businesses from unfair foreign competition by setting up trade barriers. It provides subsidies to business to make up for their losses. It offers tax breaks and tax incentives to business to encourage socially responsible behavior.

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Name some roadways or highways in your community that need work. Does the city have any plans to repair them?

continued

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Name the issues your local board of education recently passed. What did they want to spend money on?

continued

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Has your family ever bought a product that was recalled by the manufacturer because it didn’t meet government regulations? What was it? continued

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What is the amount of state tax you pay for clothing or food?

pp. 160-173

End ofChapter 11 The Role of Governmentin Business

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Key WordsKey Words

interstate commerceintrastate commerceoligopolymonopolytrustantitrust lawscontract

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Key WordsKey Words

breach of contractcopyrightpatenttrademarkrevenuesubsidiestax incentives