Grade 8C Business
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- Government plays important role in the development of the country. Through various measures it directly or indirectly regulates the market activities.
- 5.1.1:Discuss up to what extent you are satisfied that government influence on the market increases productivity and efficiency in the country.
Last date for Submission:
April 20th, 2014
Please Write Your Response in 750 Words
Note:
Marks allocation for this article is 20.
Rubrics for Marks.
A. Theoretical Explanation 5 Marks
B. References. 5 Marks [Use Harvard referencing style]
C. Use of Key words. 5 Marks
D. Evidences in the support of explanations 5 Marks
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ReplyDeleteA government can be very important in a certain market at certain conditions. A government can benefit the economy or cause harm to it. The government will be important and needed in development of a country through various measures directly or indirectly.
ReplyDeleteA government can have an effect in 4 different ways. :
1. As a consumer. When they act as a consumer they will purchase and use up the goods and services of other firms. This will be beneficial because the firms will have a buyer for their products and get more profit. However their disadvantage is that they could purchase enough goods and services to reduce the supply for the product. When this happens the price of the product will obviously increase.
One example of this is when they purchase goods and services for buffer stock. Buffer stock is emergency stock they keep in case they need it when a problem occurs. In Indonesia, we have Bulog ( Indonesia Bureau of Logistics) that main function is to stabilize food prices. Bulog is buying rice during the harvest to support the rice price and selling rice during the drought season.
By doing this Bulog is helping the government to manage the inflation rate which usually affect the interest rate. High interest rate will lower economic growth and low interest rate will encourage economic growth.
2. As an employer. When they act as an employer they will employ some workers to work for them either as civil servants or through State Own Enterprise. (SOE) The benefit of this is that this will lead to less un-employments and a better welfare for the country.
But they negative side to this is that the government may abuse and exploit the workers working for them with low pay. Another negative factor is by trying to reduce unemployment some SOE tend to over employ. Meanings they hire more worker than what they need to and as a result there are not efficient.
In Indonesia, the civil servant constitute of 4% of total Indonesia workforce of 114 million peoples. There are 2 types of employer, provincial and central. Provincial will employ workers to work for a particular region. One example of this is when the government hire people for education or police officers. Central will employ worker to work for the entire country. One example of this is when the government hires people to work for the military and protect the entire country.
ReplyDelete3. Government can also act as a producer. When they become this they will produce goods and services for the people to enjoy. The advantage is since they're governments they will focus on increasing welfare and not profit so the goods and services they produce will be at a lower price. The disadvantage is that this may seem like competition to certain firms so some of the firms competing may fail.
One example of this is when governments provide infrastructure like roads, street lights, etc. These projects usually offer low return and capital intensive, so usually Government is the one that build it . When government build infrastructure it can help attract investment from the private sector or foreigners. And once the investments comes, the economic growth will be created.
4. The main role of a government is to act as a regulator. When they do this they will set up laws and tax to control firms and increase welfare. When they set up rules they can control firms to prevent them from doing illegal or producing dangerous product. By doing subsidy on certain sector , the government could create monopoly on that sector. And by setting the tax either by increasing it or giving the tax break, the government could punish or promote certain sectors.
For example, the government is eliminating the value added tax on the low cost green car (LCGC) . By doing this, the auto manufacturer will be able to sell car at very low prices. Making LCGC the cheapest car in Indonesia. This action has attract investment from the major Japanese auto maker like Toyota, Honda, Nissan to built more factories in Indonesia.
Another example Chrysler in USA. The higher costs of ever-increasing safety regulations as one of the main reasons Chrysler needed the bailout. This trend can be seen in many industries. As the regulations increaser, smaller providers get squeezed out by the economies of scale the larger companies enjoy. The end result is highly-regulated industry with a few large companies that are necessarily intertwined with the government.
In conclusion governments is the most influential body in the economic because a single regulation, subsidy they can create or destroy companies and whole industries. Their also very powerful in creating or lowering inflation that affect purchasing power of their citizen.
Sources :http://www.investopedia.com/articles/economics/11/how-governments-influence-markets.asp
http://www.bulog.co.id/
http://igbusinesss.blogspot.com/2011/03/chapter-four-government-and-economic.html
http://www1.worldbank.org/publicsector/civilservice/countries/indonesia/shapesize.htm
http://www.bps.go.id/tab_sub/view.php?kat=1&tabel=1&daftar=1&id_subyek=06¬ab=5
http://www.matrade.gov.my/en/about-matrade/media/market-alerts/market-alerts-2013/2769-indonesia-to-boosts-infrastructure-investment-in-2013-budget-march-2013 http://en.wikipedia.org/wiki/Indonesian_car
96 % original
ReplyDeleteGovernment plays important role in an economic development of a country. They can act as an employer, producer, consumer and regulator. Government often intervene markets and companies and influence them in many ways. The intervention of government may however lead to satisfactory or unsatisfactory to some parties. The benefits and drawbacks of government influences on market will be discussed further in the next paragraphs.
ReplyDeleteIt would depend on the government themselves, whether their rules and regulations, decision-making and actions taken that will either lead to compensation or not towards consumers. Government should think about how best to improve markets, increase its productivity and efficiency. In this way, it would definitely benefit the country through markets and the economic development itself.
If markets are competitive, accurate information is available, also if resources are liquid, and individuals appealing in the transactions bear the full costs and receive the full benefits of their transactions, economic efficiency will be achieved. Markets can drift significantly from the competitive ideal. Firms may acquire significant market power, undertake deceptive practices, etc. When this occurs, government intervention can produce markets that operate more efficiently than they would on their own.
Another advantage from government influence is reducing negative externalities. An externality is any effect on people not involved in a particular action. Externalities will normally cause competitive markets to behave inefficiently from a social aspect, since those affected in the economic transaction do not convey the full costs of the transaction. In this situation, government can intervene by taxing the transaction and using the money to abolish the harmful effects or to compensate those disturbed by the negative externality or subsidizing positive externalities.
Higher economic growth will also develop larger tax payments for governments. This allows governments to invest more towards infrastructure and social services. When government invests more towards infrastructure, there will be improvements in technological equipments, machineries, more capital and transport. These advancements could help increase productivity of goods and services in the market.
Fiscal policies that affect the taxation of capital gains, dividends and interest gains may eventually have an impact on market activity. Take for an example, favorable policies such as tax cuts could persuade investors to become more active in buying and selling, while unfavorable policies might cause individual to move to alternative investments. Government often increases tax for the addition of capital assets yet will not increase productivity in the market because higher prices on goods and services will make consumers choose to buy less.
ReplyDeleteIn addition, through monetary policies, governments can indirectly involve themselves in the market by altering interest rates and taking part in open-market operations. This means that cutting rates will discourage investors and companies from putting their money into fixed-income investments. The lower the rates, instead, may encourage borrowing for investment purposes.
Interest rates and inflation has a typically inverse relationship. The higher the interest rates, the lower will be the inflation. The lower the interest rates, the higher will be the inflation. This is because if there is more money in an economy, people tend to spend more, thus, driving up the cost of goods and services. If there is less money in an economy, there is less to spend and low demand equals lower prices. Same manner if interest rates are low, money is easier and cheaper to borrow, hence more money in an economy. If rates are high, it is more expensive to borrow, hence less money in an economy. Government therefore, should be wise in adjusting the interest rates, in order to meet the objectives of increasing productivity and efficiency in the market.
The government may choose to intervene in the price mechanism largely of wanting to change the allocation of resources and achieve what they apprehend to be an improvement in economic and social welfare. This is just the same as increasing efficiency in the market. All governments of every political persuasion intervene in the economy to influence the allocation of scare resources among competing uses.
However, there is never any guarantee governments will make the right decisions. Monopoly power can exploit consumers with higher prices. Government legislation is to prevent monopoly power in the hope to increase productivity and efficiency in the market. Preventing mergers can help to keep markets competitive and prices more allocatively efficient. Nevertheless, in the case of monopolies there might be a strong possibility that government intervention will increase economic efficiency. Despite the possibilities, there are many more cases wherein markets fail to allocate resources efficiently.
In conclusion, government influences may increase productivity and efficiency in the market, however, there are possibilities of market failures if government do not make the right decisions.
98% Originality
Resources:
https://www.boundless.com/economics/principles-of-economics/interaction-of-individuals-firms-and-societies/government-intervention-may-fix-inefficient-markets/
https://www.boundless.com/economics/economic-growth/productivity/the-importance-of-productivity/
http://www.economicshelp.org/blog/2343/economics/governments-and-economic-efficiency/
Government intervention is the regulatory actions taken by government to change the economy. These actions may take many forms from taxation, regulations, legislations, etc. The government will usually intervene to fix market failures and improve the market’s performances and efficiency. Government intervention in the market sets out to achieve two objectives: social efficiency and equity. One of the main issues in economics, though, is the extent to which a government should intervene in the market.
ReplyDeleteHaving the government interfere in the economy will bring a certain benefit of its own. When the government intervenes, they ensure fair distribution of the yields of development. The government intervention in the market can result in external economies of scale of firms. Whilst the firm enjoys its economies of scale, the government also protects the society. The government will ensure that the market doesn’t end in monopoly, making sure that the market is efficient. If the actions are correctly and limitedly taken, the government may be able to correct negative externalities.
The government is most likely to intervene in a market when market failure, like asymmetric information or externalities, occurs. Because the free market doesn’t produce the most socially efficient output, producing negative externalities, the government will intervene. Most times, the government will impose tax and subsidy to change the demand and reduce the externalities. For example, a profit-maximizing firm will ignore the side effects and pollutions produced by consuming their output – cigars. By taxing production, which causes externalities, it is hoped that less negative externalities will be produced.
Government intervention promotes equality of income, wealth, and opportunities. Since it is widely known that in a free market, there tends to be inequality, the government will usually intervene. Inequality in a free market is most likely to be created from the monopoly power one may own. Without government intervention, firms will have the ability to exploit resources: workers will be paid lower wages and consumers will be charged higher prices for a lower quality product. Therefore, government involvement is crucial to establish a greater equality of income, wealth, and opportunities.
Other times that the government will intervene, is during a recession. In recessions, there is a sharp fall in private sector’s expenditures and investments, leading to a fall in economic growth and collapse in businesses’ confidence. At this point, the government is needed to encourage the market to rise back. Many economists believe that a fiscal policy will be able to positively influence the market.
On the flip side, government intervention can potentially cause more problems than it solves, wrecking the economy. The government can make wrong decisions for the market, especially the government of the LEDCs or less developed countries. The government in an under-developed country is either inefficient or corrupted and therefore may create even greater problems to the economy. Besides, too much government intervention can lead to inefficiency and less competitivity, which is not good to the market. Moreover, it can result in greater inflation, greater public debt, and less liquidity will be available.
ReplyDeleteAll the disadvantages vary depending on the actions taken by the government to change the economy and correct market failures. As an example, some government may impose tax on harmful products and subsidized products with strong social benefit. A benefit may occur when this method is used, but it will certainly bring some drawbacks. If subsidy is always used, the market will become dependent on them. If tax were used, then it would drive the cost up and reduce demands.
Other cases, government intervention may result in slower economic growth, greater public debt and greater inflation. Actions like increasing deficit and government spending to change the economy are often taken by government. Such actions may be harmful to the market. The government often borrows money to pay for subsidies, which will drive up the interest rate and push businesses out of the market. This causes businesses to cut their spending and lower their production level. Now that there is a lower supply for the unchanging demand, inflation occurs. Long story short, the government intervention has lead to more problems in the market.
Governments with successful economies will adjust to how much they will need to intervene in the market, in response to the effects of their actions. Government aid can help, harm, or even some doesn’t matter much to the market. It can’t necessarily be generalized, but it is known that the government should only take a limited role in the economy, allowing private sectors to make decisions for their businesses.
Even though government involvement in the market has its perks, they carry their disadvantages, too. Government intervention can lead the market to a greater efficiency and productivity, with the right methods and decisions. However, there is no guarantee that the right methods and decisions will be used to the market. Therefore, the government should take limited role in the economy, only correcting the market failures and improving the market’s performances and efficiency.
Anabelle – 8C
Originality (based on plagiarisma.net): 98%
References:
• https://www.boundless.com/economics/principles-of-economics/interaction-of-individuals-firms-and-societies/government-intervention-may-fix-inefficient-markets/
• http://lamar.colostate.edu/~alex/EC202H/lec20.html
• http://www.ehow.com/info_8646461_advantages-disadvantages-government-intervention.html
• https://answers.yahoo.com/question/index?qid=20111023141109AApfFvb
• http://wiki.answers.com/Q/What_extent_should_government_intervene_in_the_economy?#slide=11
Government influences can greatly affect the market. Government influences usually bring positive effects, but too much intervention can ruin the country’s economy. Government can act as these to improve the country’s market.
ReplyDelete1. Government as producer: The government is a producer because they pay attention to the economic struggles that we have on a regular basis . They usually acts as a producer supplying goods such as energy and health to the people. In this case, the government extends benefits to the consumers by providing them cheaper access to certain services.
2. Government as consumer: Sometimes, the government also acts as a consumer to assist suppliers in selling their goods. They act as a consumer, and they will purchase and use the goods and services of other firms. This will be beneficial because the firms will have a buyer for their products and get more profit. The government will sometimes purchase the goods created by the farmers to protect them financially.
3. Government as Employer: When they act as an employer they will employ some workers to work for them either as civil servants or through State Own Enterprise. The Government creates preconditions for success and welfare for our entire society. The Government as employer seeks that its operational units, which is in function in citizens, enterprises and communities, are innovative in their own task areas. As part of the public sector, public administration is responsible for a diverse field of tasks and assignments, including the security of the people, education and culture in addition to other basic functions and sustainable development of society.
4. Government as Regulator: Regulatory environments consist of laws and regulations that have been developed by the national and local governments in order to exert control over business practice. The legal and regulatory environment plays an important role in the success of a change based economic development. Traditions of private sector companies operating within the regulatory limits, and those of other shareholders, often lead to conflicting objectives. The function of government as a Regulator is to ascertain that the perspectives concerning the interests of each shareholder are met, without sacrificing long term benefits for them. This is a tough act to accomplish but that is the role of government as a regulator.
References: www.fee.org/the_freeman/detail/government-as-consumer
sgo.sagepub.com/content/2/1/2158244012441603
http://www.fetsystem.com/economic/government-as-a-producer
Originality: 87%
Government Regulation plays an important role in helping markets function effectively, and ensuring that they support wider policy goals.
ReplyDelete• Regulation can also distort competition
– particularly by affecting the scope for new firms to enter markets, and the ability and incentives of firms to compete with each other.
• It is important to identify possible unintended consequences of regulation. Carrying out a competition assessment of new policy can help with this.
• To reduce distortions, policy makers should seek to minimise regulation, subject to achieving the wider policy objective.
• Market-based approaches can sometimes be an effective alternative to direct regulation, harnessing markets in a way that fits with wider policy goals.
Government gives subsidies to help the poor(to reduce poverty) and tax to the people to improve better economy in the country.
• Subsidies and taxes affect competition by changing the costs of some businesses, and hence influencing their production decisions.
• This can have positive effects.
For example, subsidies can be used to increase financial support for high growth small businesses, and taxes can be used to reduce environmental pollution.
• However, subsidies and taxes can also create entry barriers in a market and allow firms to build and exploit market power.
• In designing subsidies, policy makers should consider carefully both the degree of competition in the market, and the way in which different approaches might affect this competition to minimise the potential negative impacts on competition.
• Subsidies may constitute state aid and require legal cover.The competition assessment should be complementary with the state aid analysis.
Government plays an important role in the economy:
1.Government as an influencer : Government is increasingly seeking to influence consumer behaviour and firm actions indirectly.
• Encouraging self-regulation can be
an effective way of avoiding direct regulation, but it is important to be aware of the potential for encouraging anti-competitive coordination.
• Behavioural economics suggests that consumer behaviour plays a key role in determining the degree of competition in some markets. Government and regulators may have an important role in ensuring that consumers can play an active role in markets, for example through having the appropriate information and being able to switch supplier easily.
2.Government as a market maker : Government is increasingly seeking to influence consumer behaviour and firm actions indirectly.
• Encouraging self-regulation can be
an effective way of avoiding direct regulation, but it is important to be aware of the potential for encouraging anti-competitive coordination.
• Behavioural economics suggests that consumer behaviour plays a key role in determining the degree of competition in some markets. Government and regulators may have an important role in ensuring that consumers can play an active role in markets, for example through having the appropriate information and being able to switch supplier easily.
3.Government as a supplier : There can be situations where direct provision of goods and services by Government is in the best interests of consumers.
• Where it is the direct provider, Government needs to be aware of the costs of crowding out private sector activity.
• Similarly, Government should ensure that public bodies that compete alongside private firms do not distort the market unfairly.
• In some cases Government can open up new markets by freeing up access to monopoly services – for example by making it easier for private firms to access public sector information.
Although government regulations and role in the market is very important, but they can also bring disadvantages. Government should choose the right decisions to make a market welfare. If the government choose the right decisions, then productivity will increase.
ReplyDeleteReferences:
BERR (2007), ‘The state aid guide: guidance for state aid practitioners’, www.berr.gov.uk/files/file42032.pdf
BERR (2008a) ‘Competition Law: Issues which arise for business when the Government or lobby groups seek to encourage businesses to work together to deliver desired policy outcomes.’www.berr.gov.uk/files/file45711.pdf
BERR (2008b), ‘Public Service Industry Review’,www.berr.gov.uk/files/file46965.pdf
Crafts and Mills (2001) ‘TFP Growth in British and German Manufacturing, 1950-96,’ CEPR Discussion Papers 3078’
DTI (2004) ‘Economics paper no. 9 – The Benefits from competition: some illustrative UK cases’,www.berr.gov.uk/files/file13299.pdf
DTI (2005) ‘Economics paper no 14 - Public Policy: Using Market-Based Approaches’,www.berr.gov.uk/fs/file14759.pdf
European Commission, Directorate-General for Competition (2008) ‘Vademecum: Community law on state aid’, http://ec.europa.eu/comp
Every country needs government. Government plays a very important role in each country. This is why election is present every 5 years. Government can act as employer as it helps those unemployments to get job through the stores made by government, government also acts as producer as he opens stores of and produces something. Government also acts as consumer that he buys those things needed to be given to those poor people.
ReplyDeleteGovernment affects those markets in various ways. But the most common one is the productivity. If we think logically, when government opens bank for the citizens, it improves the borrowing system for markets. Therefore these markets are able to borrow banks’ money in order to produce more. There are still many other ways that government affects market though.
When you read the sentence “government also acts as consumer”. Dont you think this is one of the effects of the increase in a market’s productivity? Because it is. When government orders the goods, he will purchase a large amount of the good(s) since if he wants to give subsidies to a specific place, he needs to give the subsidies to all the people living in that specific area. If he only gives to some, the others will think that he’s unfair. In this way, the producer of the product will produce more for the government.
The other reason why government wants the markeets to increase their productivity is to increase the market of the country. All the markets in each country will be represented by a market in the country. As the productivity increases, price goes down. As this happens, there will be more demand. In this way the market of a country will eventually raise. Markets of different countries are always competing. This is why government keeps on telling the markets in the specific country the average production they need to produce in order to win. Government is not the one who makes the prices of products, he’s not the one to tell the markets what to do, its the markets’ choice. But government can actually try to control the productivity by increasing the tax. By increasing the tax, the markets will have a harder time to collect money for the tax. The only way for the markets to be able to have enough money to pay the tax is by increasing productivity and lower the price to receive more profits.
Government’s job is to satisfy all the citizens including the markets. By making a market increase the productivity, the citizens will also be satisfied. And besides, this will make an improvement in the country itself that the citizens will not import goods from another contry anymore. This will therefore make people see that the countryy is able to saatisfy the citizens from what the country has.
Eventhough all these things are good for the country, this will not always work. Some citizens still dont like their country made’s product. Some thinks that the higher the price, the better the product. Some also thinks that the name of the product is more well known from other country. Which will make the consumer looks richer.
So from all these you’ve read, you can actually see that government really does play an important role. It has been proven by all the things we discussed. Government is also needed for those poor people. If there is no government, who else will give subsidies to the poor people? Who else will help those poor people to keep their lives?
On the other hand, government helps markets to get more profit. This happens when governmetn makes the markets increase productivity. well this may fail sometimes, if the market is not good enough in controlling the stuffs. But if the market really follows the instructions, it will make great success. Government also satisfies consumers because consumers will have lower price. So the conclusion is that we need government in our country.
-Jacqueline Sheerine Andersen-
Government intervention to the economy is the economic actions and regulations set by government, in an effort to impact the economy beyond the basic regulation of fraud and obligation of contracts and supply of public goods. Therefore, a government accounts a vital role in the economy of a country.
ReplyDeleteA government intervents by playing four major roles: Government as consumer, producer, employer, and regulator. Government also sets out taxes and subsidaries to the people that, in exchange, may support them in intervening the major roles.
The intervention they put to the economy is to attain the two goals: social efficiency and equity. Issues of equity are difficult to judge due to the evaluation of what is and what is not, an equal distribution of resources.
Many of the times a market might not be efficient in allocating commodity.
A government may interfere to change the allocation in order to achieve desired improvement in economic and social welfare. Government also correct or fixing market failure occuring in the economy. It also helps improve the performance of today's economy and achieve a fair distribution of wealth and income.
Government intervention benefits the people better than a market, such as helding citizen protection, which happens when government attempts to conduct the needs of their people. Their intervention has its budget, not just the financial cost, but also include losses of individual freedoms and unwanted consequences. For that reason, there are pros and cons.
Government plans a centralized development where smaller units and people are focuse on subject, helps reduce in reduadancies. This ensures better cooperation and harmony to the nation.
Government are large scale endeavors. By this, they can produce a large scale of output without having to increase costs. The costs can even be further reduced, thus outputs are great on the market. Government intervention can also manage that further developmential efforts may not result in harmful social costs, such as damage to environment, and monopoly economies.
Government's massive size and their economic resources (as compared to the resources controlled by the private sector) secures ambitious efforts and many outstanding results.
However, the role of government to the economy can bring in certain disasters. Firstly, intervention can brake down or delay further the workings of profit motive, free private competition. Competition in the country will be less, and is not essentially beneficial since it may result in a weaker economy due to less hard working. Governments are often less economically inactive in controlling and are rather passive compared to the profit-oriented private sector.
If a government focuses too much on the outlays on projects, it can result in the increase of public debts, and by that resulting in greater price inflation. Also, less liquidity is available on short run uses. A country's variety and choices available will be less in front of citizens. Most governments in LEDCs are either inefficient and many of its members face corruption.
To conclude the essay above, government intervention performs a wide role to a country's economy. It might improve the market and is centralised on benefiting citizens by several methods, but is not always economically efficient. Instead, it has heaps of other disadvantages if regulations are not strong enough. Too much control by the government itself is not good, - and therefore should be limited so that private companies may set itself too. By balancing the roles in the economy, it can improve market failures and at the same time making profits.
Sources:
https://answers.yahoo.com/question/index?qid=20060718082709AAMcn4L
http://wps.pearsoned.co.uk/ema_uk_he_sloman_econbus_3/18/4748/1215583.cw/
www.ehow.com/info_8646461_advantages-disadvantages-government-intervention.html
http://en.wikipedia.org/wiki/Economic_interventionism
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A government plays an important in a specific country. They have various functions that are effective to the country to move forward. Governments can act as a producer, regulator, consumer and an employer. Government is very important and are needed in a country to push the country forward and improve their reputation. They will make rules and regulations that are required to be followed by the citizens to have a safer and better living society and country. They will also revise those that needs to be revised. Those changes or improvements that are made can be accepted by the citizens either satisfying or unsatisfying. Which may sometimes lead to a democracy. Some companies and consumers may accept the actions as a benefit that have been done by the government.
ReplyDeleteFirstly, government provide subsidies. Subsidy is the action done by the government where they give benefit to groups or individuals normally in a form of cash payment or tax reduction. Also, with subsidies, prices are reduced. For consumers, when they are awared that governments use subsidies and therefore reduced cost and prices, it is a great advantage.
Secondly, a minimum wage is implied to the society. A minimum wage is the lowest hourly or monthly remuneration that employers are legally paid to workers. This motivates and encourages those that are unemployed to search new jobs. This can provide a better living for some citizens that used to not have a job, but now have one due to the minimum wage. One of the benefits include, receiving wages that can be used to pay taxes and social needs in life.
Last but not least, government acts as a consumer. They consume emergency stocks that are important for those in need of food grains, clothes and etc. due to natural disasters that may have happened in that specific area. Due to this, some other consumers will be interested to buy the same type of product that the government consumed their emergency stocks. Those brands that are a public limited company and are relied by the government can increase its number of consumers and reputation. This type of action increases the company’s productivity and efficiency in the market.
However, there are also some improvements made by the government that are not a favour in the eyes of certain companies and consumers. The development of the country depends on the attitude, motivation, dedication and action of the government. There are some governments that are highly motivated to work their best in pushing the country forward. Those governments are efficient and active. However, there are also governments that are not as motivated as active governments. They are passive. They don’t work their best and are not highly dedicated to push the country forward. This can affect the reputation of the country and other physical things. By physical things, in other words, appearance. Such as, the infrastructure, the roads, the monument and etc. For example, in Jakarta, there are some roads that are unofficially improvised, and citizens littering everywhere, which results having flood easily.
Firstly, some governments may be passive and not active. In this case, this creates a slower economic development in the country. When governments are passive, whenever they receive taxes, they will not use it wisely. For example, they will not use it to improve infrastructure, roads, wages paid for the government workers may be reduced and etc. This might also destroy the reputation of the country. In such cases, inflation may rise. Inflation is when prices are increased.
Last but not least, when governments don’t use their taxes wisely, corruption may happen. But taxes can’t be used too often because it can affect the demands in the business market. This will later on, create a problem with the company. It can flunctuate their productivity and efficiency.
Furthermore, government is important in the country. They can bring advantages to the market that can satisfy you. Other than that, there will also be moments when they fail to satisfy the citizens and influence the market. But even if the fail to do so, they are still important. This is because they are the ones that decide on everything. The infrastructure, the roads, street lights, electricity, all of those are provided by the government.
ReplyDeleteAlso, when a natural disaster hits and most of the social needs that have been prepared are gone, the ones that provide new ones are the government. They provide emergency stocks for those who are in need. Governments are also the ones that provide jobs. Those fire services, taxation service and etc, are all working for the government. They provide jobs for those that are unemployed, and governments are consumers.
In conclusion, governments are extremely important in a country, which is why every country must have a government. They are the ones that make heavy decisions and influence markets and the country itself.
originality - 100%
SOURCES: http://www.ehow.co.uk/info_8362711_advantages-disadvantages-limited-government.html
http://www.washingtonpost.com/blogs/wonkblog/wp/2012/09/18/who-receives-benefits-from-the-federal-government-in-six-charts/
What is regulation?
ReplyDeleteRegulation is a tool used to achieve social, political, environmental and economic outcomes that would otherwise not be achieved within the market. Regulation can often have negative outcomes, but it is still necessary. Without an external regulatory force, markets may not always work properly or effectively. The ultimate goal of regulation is to ensure a smooth, fair and honest operation within the market.
The environmental regulation
The market can't put a price on good or services that bring negative impacts for example using a natural resources , we Cut down the free and sell it whatever the consumer ask but government make a rules and regulation to help measuring the price of one tree
Other example is an businessman want to make a new mining area , government make a regulation to that mining area to make the proposal of the benefit and advantages and knowing other people will accept it or not , because if the people there didn't accept the new mining area they will attack/destroy or keep complaining to government to remove that mining area so government will only agree when the benefit of the new mining area are greater than the advantages such as job creation , less pollution will be made
Public goods and services
Government regulation is needed to address social issue, such as health problem, poverty. People who are sick can go to the hospital that government made and get free treatment and provide some subsidy to the consumer who unable to paid to get that goods or services. Government get this money by collecting tax from us
Urbanization
Local government also have important role in developing countries , regulation is needed to make a new urban area for example city council usually is the one who responsible for enforcing the planning policies within a designated urban area the government also influences a public services example : traffic light, toll roads , hospital
Other example of government influences in regulation
Handling Legal Concerns: . Not all legal issues will necessarily require a lawyer. It’s always better to get timely information about the updated legal issues and their impacts on your business.
Labor and Employment Laws: You can hire employees through independent contractors or you hire yourself, you need to have firm understanding of federal and state labor laws that covers various aspects such as wages.
Industry Laws and Regulations: There are some laws that state how the business should be regulated . We must see various laws pertaining to our business such as finance laws, online business laws, advertising laws.
But since there is a government law in industry there is a falling rate in industry but government regulation can benefit us in social for example censorship,sexual abuse , labour exploitation government also have a regulation to punish people who is doing corruption or the one who against the law government decided to jailed people and they make sure security of our country for example war in our country government will send army to the battlefield
Government rules and regulation will be effective in providing social benefit because there is many advantages for example monopolies regulation in the country government try to remove monopoly system and make many competition there but government rules and regulation in the production will make the company or factory slow down
swirk.com
http://www.fee.org/the_freeman/detail/government-regulation-of-business-the-moral-arguments
http://www.theenterpriseoffice.com/regulations/the-importance-of-organization-and-government-regulations
This comment has been removed by the author.
ReplyDeleteGovernment intervention is regulations by government to interfere the decisions regarding social and economic matters that may affect the country. Government intervention is to provide market competition and help the market to achieve national policy objectives. Government has several objectives for interfering in the market – to respond to market failures, market power abuses, improve economic efficiency, and equivalent distribution of income.
ReplyDeleteThe main advantage of government intervention in the market is to fix the market failures. Market failure may happen when allocation of goods and services in a free market is no longer efficient. Government intervention in market failure is to improve the outputs. One of the problems of market failure may be cause by problems in information. This may happen when there is a lack of information for buyers, and the market may not work well. Government intervention will license sellers to provide full information about the product being sold. Government would regulate the market and see if the sellers provide correct information.
There may be inequality of distribution on income and/or wealth. Government will interfere in the market if this happens to balance the distribution of income and wealth, to improve equality of opportunity and outcome. Taxes can be use to distribute income to the poor. Government can take larger percentage of tax from those who receives large income, and smaller percentage of tax from those who receive lower income. In this way, the poor can save a bigger amount of their income.
Negative externalities happen when the production or consumption of goods causes harmful effects on third party. Government can reduce negative externalities by charging higher taxes to goods. Taxes provide incentives to reduce negative externalities, and it may increase public income, which can be use for infrastructures. Government can reduce subsidies to reduce negative externalities because subsidies attract more firms to the market.
In a free market, a monopoly may occur, which the firm could charge high prices for consumers. Government can create rules and regulations for monopoly to restrict the existence of monopoly in the market that may lead to lower prices and greater economic efficiency. Government intervention can regulate monopoly to prevent excess prices of goods and services, ensure that firms have a minimum of standard quality of goods, etc. Government acts as a regulator as they are giving rules and regulations in the market.
Government intervention may not always bring advantages. Government decision of interfering the market may bring disadvantages too. The government may sometimes may wrong decisions that may be caused by political pressure. As the result, they can spend more time and also increase public expenditures by working on inefficient projects that also may not produce useful outcome. The wrong decision may lead the country to slower economic growth.
ReplyDeleteGovernment intervention may lead to shortages as it may base on poor information. It sometimes may not be efficient if policies by government changes too frequently or drastic changes. The frequent changes on policy may not be what the people of the country want, as they need to adapt to the changes on policies.
Government failure may occur when government tries to correct market failure but however creates inefficiency. There may be times where government may not be able to control the market and make wrong decisions. Wrong decisions can lead to further market failure. When market failure occurs, it may not bring economic efficiency and slower the economic growth on the development of a country. Government intervention may lead to inefficient allocation of goods and services.
As the conclusion, government intervention on the market may lead to greater efficiency and economic growth of a country. It also may reduces market failure. However, if government makes wrong decisions when trying to fix market failure, it may lead to further market failure, inefficiency and slower the economic development of a country.
Originality: 100%
Resources:
o http://www.slideshare.net/mscuttle/government-intervention-in-markets-presentation
o http://are.berkeley.edu/courses/EEP101/Detail%20Notes%20PDF/Cha02,Market%20Failures.pdf
o http://www.economicshelp.org/blog/5735/economics/should-the-government-intervene-in-the-economy/
Like all government in all countries the government has one main task which is to regulate the market so that there won't be any kind of monopoly in the market. other than that government have other role such as : as an employer, as a producer, as a consumer.
ReplyDeleteGovernment as an Employer: as an employer government employs people who haven't had a job yet or can't have a job yet, they basically employ them in public services sector such as making them as the local police, the armed forces, marines firefighter and etc. examples for this is from the united states where it's national defense sector employs more than 3.1 million citizens to work as local police, armed forces and etc this means that the government has increased the productivity of the people by giving them jobs for those who haven't gotten any
Government as a producer: As a producer government build or creates goods that private sector firms doesn't want to produce such as : roads, Jail/Prison, and it also supplies them with free public services such as free education or education with subsidies.
Government as a consumer: as a consumer government purchases goods where other people r firm doesn't want to buy such as farmers from outskirts of town and after government buys them it will be then handed out to the poor families for free or will be sold with subsidies
But sometimes the government doesn't always bring welfare to the citizens or people of the country but sometimes it's policies can bring disadvantages to a country such as it's laws, rules and regulation can disrupt the equilibrium between producer and consumer in a market.
And now as an end to our discussion i am very satisfied with the government interventing to make our country better and more productive even though sometimes it may also bring disadvantage to a country but it benefits the country more than giving the disadvantages.
References:
http://www.ask.com/question/government-to-consumer
en.wikipedia.org/wiki/List_of_largest_employers
Cornered notebook
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First of all, government is the system by which a state or community is governed. While a regulation may refer to a process of promulgation, monitoring, and enforcement of rules, established by primary or delegated legislations and a written instrument containing rules having the force of law in which a regulation creates limits, constrains a right, creates and limits a duty, and allocates a responsibility.’
ReplyDeleteThe advantages of government regulation may include there will be no compete of companies among themselves if there is a government regulation, since if there is a compete among themselves by companies, they will raise markets and ensure that business are going to be succeed, which will make the small business go to have a bankruptcy since the small business are not able to survive and only those business that are having a large company that are able to survive and the big companies will have their own regulation and if they think they are a big company and they are able to control the market in that area, they will create a market monopoly, in which will affect the disadvantages for the society such as higher cost for the product, lower quality will be produced by the company of that product, and many other more. The other advantage of government regulation is can lower the level of criminality in that area since government regulation includes consequences given to people when they did a wrong thing and criminality includes a wrong thing and so people will feel scared and afraid to do a criminal things. Also the advantages of government regulations include subsidies given to a particular goods and services in which government will give an amount of money directly to the society or give the amount of money to the company that are producing that product,. The example of the advantages of government regulation in Indonesia are in which the subsidies given in a petroleum (pertamina) in which the normal price of petroleum in Rp.9,500.00 to Rp.10,000.00 but since the government give a subsidies on it, the society only need to pay for Rp.6,500.00 per liter, also the other example in Indonesia include the subsidies for education in which the student only need to pay for their books but they didn’t need to pay for their school fee in the government school, also the healthcare given to the society in Indonesia so all people can got a justice for their healthcare, which actually subsidies help all people to fulfill their daily needs, if government doesn’t give subsidies on petroleum, the poor people are not able to buy motorcycle or car since the petroleum are expensive, also if government didn’t give subsidies on education, poor children will not be educated and if government didn’t give a healthcare for the poor people, many of them will die of just a simple sickness since they can’t get free from their illness.
While the disadvantages of government regulations include if the government didn’t give a clear instructions on their regulation, many people will not be able to do it well, and the worst thing, many people will break the regulation which will make a disadvantage for themselves, their country, and the society living in their country. Also subsidies is included as a government regulations, in which subsidies is an amount of money given from government directly to their societies or to the company producing a particular product so that the price on that product will be lowered, in which a subsidies is a money so government also need money to make that subsidies also when the government want to make a public goods, they need to buy some raw materials that also require a money, and so the money come from the tax given by the society to the government namely tax which can make the income for that company or individual lowered because of the tax. The example of this disadvantages is in India where In the taxation company suddenly knew that it would be disadvantages for the lowered earning people since for example their monthly earning is small but they also need to pay taxes which will make their income be more smaller.
ReplyDeleteIn conclusion, the presence of government regulation will result on more efficient because government regulation may make a better country since there is a rules that need to be fulfilled which help the society to be more discipline also can help the poor society through subsidies.
Sources :
• http://en.wikipedia.org/wiki/Government
• http://en.wikipedia.org/wiki/Regulation
• http://indianapublicmedia.org/news/indianas-tax-structure-regressive-income-groups-44189/
• http://society-politics.blurtit.com/1400384/what-are-the-advantages-and-disadvantages-of-government-deregulation
originality : 97%
This comment has been removed by the author.
ReplyDeleteThe government plays an important role in a country, especially for development. The intervention and policies of the government may give positive or negative impacts to the whole economy or country. When the efficiency of one increase, the productivity might increase as well.
ReplyDeleteThe government may intervene to act as an employer and consumer. Also, the government may give policies to companies that might affect the productivity of one’s employees.
The government may act as an employer. Government may employ many public servants to work in government departments such as teachers, doctors, nurses, judiciary and the police to grow and bring government policies and services. This may decrease the unemployment rate of a country, as more people are needed by the government agencies.
The government may act as a producer. Expenditures collected to the government can be used to build such goods and services. Government may spend on public goods and merit goods involving education, healthcare and many more. This will allow young people to be educated and help to give many skills and knowledge when working in a company. Government may use the money to build national infrastructure like roads, railways and many more. For example, when roads are widened, vehicles can go to their destination quicker, this allows people to be more efficient in their time spent and can do many more important things in a day. Government may give subsidies to those people who are unable to pay by lowering the prices of goods and services of certain companies. This will allow companies to increase their production and makes the government involved in providing financial services. Overall, these will increase the companies’ productivity of labour and efficiency.
The government can intervene by using the money from the taxes paid by the people to disallow the harmful effects affected by negative externalities. Negative externalities may be pollution and many more.
The government might use the expenditures on many other useless things like such. Some governments may use the money to corrupt or to use on something that doesn't help to develop the country.
Government may give certain policies in macroeconomy that might benefit workers. For example, the government mandating 5% of the total revenue of a company must be used to train employees. Another example would be tax deduction on all employees training. The government states that the tax rate is 35%. When a company’s original revenue is $10 million with the training cost of $2 million, the company will pay less tax. This will allow workers to by more productive and increase efficiency in the overall economy.
ReplyDeleteHowever, the government may set wrong laws and regulations to companies that might lead to a problem. For an example, the government states that the minimum wage would be $5 in America. In a clothing company, one worker takes 1 hour to sew one shirt. In China, an employee sew the same exact shirt is made in 30 minutes, to be paid $1. It shows that the productivity of the American employee is less and loss for the company. This might actually make a company and the employees inefficient and less productive.
The government can actually affect the economy as it intervenes and sets policies in a country. It may result into both positive and negative sides in a country. If the government intervenes the right way and give the right policies, people are satisfied by what the government has done to develop the country. If not then some people may be not satisfy as an economy will grow slowly.
Reference:
Textbook
https://www.boundless.com/economics/principles-of-economics/interaction-of-individuals-firms-and-societies/government-intervention-may-fix-inefficient-markets/
Originality: 95%
Government has influences on the market. Government plays four roles in the economy: government as a consumer, government as a producer, government as an employer, and government as a regulator.
ReplyDeleteGovernment plays a role as a regulator in the market. Regulatory environments consist of laws and regulations that have been developed by the national and local governments in order to exert control over business practices. The legal and regulatory environment plays an important role in the success of change based economic development. Traditions and attitudes of private sector companies operating within the regulatory limits, and those of other stakeholders, often lead to conflicting objectives. The function of government as Regulator is to ascertain that the perspectives concerning the interests of each stakeholder are met, without sacrificing long-term benefits for each of them. This is a tough act to accomplish but that is the role of government. Government regulates rules such as taxes, interest rates, and et cetera.
As a producer, government produces goods that are public. These public goods are for everyone to use. Public goods include toll roads, electricity supply, water supply, and et cetera. Government also produces public services such as the police department, government hospitals, and government schools.
With influence from government in the economy, there can be possible benefits:
- Production of useful goods to satisfy customer wants.
- Create employment/increases workers living standards.
- Introduction of new products or processes that reduces costs and widen product range
- Taxes help finance public services.
But aside from benefits, government influences in the market can also result in disadvantages. Possible undesirable effects could be:
- Business might ruin cheap but beautiful areas.
- Low wages and unsafe working conditions for workers because businesses want to lower costs.
- Pollution
- Production of dangerous goods.
- Monopolies
- Advertising can mislead customers.
Government has aims for their country, which are low inflation, low unemployment, economic growth, and balance of payments.
Inflation occurs when prices rise. When prices rise rapidly many bad thing could happen. Workers wages buy less than before. Therefore their real income (how much you can buy with so much money) falls. Workers will be unhappy and demand for higher wages. Prices of local goods will rise more than that of other countries with lower inflation. People may start buying foreign goods instead. It would cost more for businesses to start or expand and therefore it does not employ as many people.
Some people might be made redundant so that the business can cut costs. Standards of living will fall. This is obviously why governments want to keep inflation as low as possible.
DeleteWhen people are unemployed, they want to work but cannot find a job. This causes many problems. Unemployed people do not work. Therefore national output will be lower than it should be. The government will have to pay for unemployment benefits. This is expensive and money cannot be use for other purposes. If the level up unemployment is low, it will increase national output and improve standards of living for workers. A country is said to grow when its GDP (Gross Domestic Product) is increasing. This is the total value of goods produced in one year. The standards of living tend to increase with economic growth. Problems arise when a country's GDP fall. The country's output is falling, fewer workers are needed and unemployment occurs. Standards of living will fall.
Businesses will not expand because they have less money to invest. Economic growth is not achieved every year. There are years where the GDP falls and the trade cycle explains the pattern of rises and falls in national GDP.
Exports earn foreign currency, while imports are paid for by foreign currency (or vice versa). The difference between the value of exports and imports of a country is called balance of payments. Governments try to achieve a balance in imports and exports to avoid a trade deficit, when imports are higher than exports. Of course, the government will lose money and their reservoir of foreign currency will fall. This results in. If the country wants to import more, they will have to borrow foreign currency to buy goods. The country's currency will now worth less compared to others and can buy fewer goods. This is called exchange rate depreciation.
So in conclusion, the influences made by the government to the market may result in disadvantages and also advantages.
Ref:
- http://www.investopedia.com/articles/economics/11/how-governments-influence-markets.asp
- http://www.fee.org/the_freeman/detail/government-as-consumer
- http://economics-igcse.weebly.com/-the-government-as-a-producer-and-an-employer.html
Kevin 8C
There are four roles that government could be. First role as consumer, the second role as producer, the third role as employer, and the last role as regulator. These roles are used to do some development on the country.
ReplyDeleteFirst, government as employer, it could be central govt or provincial govt. Central govt or we can say as federal government is the government of a nation-state and is more typically a characteristic of a unitary state. The examples for central govt is immigration, arm forces, coast guard, etc. If the example of provincial goverment is police, education, traffic, etc. Second, government as producer. Government produce roads, transport services, schools. They also make traffic lights, railway, highway, mrt, etc.
Third, goverment as consumer. Goverment need to have food supply and oil supply, it will be needed when chrisis or disasters are happening. Government need to buy the food and oil from the other companies, because they cant produce it on a particular time. When there are people that experiencing an earthquake or eruption or etc. And it causing a lot of damage, it is government role to give the food supply to them, because they dont have anything anymore.
Forth role is as regulator, government need to prevent monopoly that is used by firms to compete with the others. Making a central bank also as regulator, A central bank, reserve bank, or monetary authority is an institution that manages a state's currency, money supply, and interest rates.
For example: when government is planning to make a new bridge, government will need the raw materials such as cement, sand, steel, etc. That raw materials are bought from private firms (government as consumer) when they want to make it, government cant just make it alone, it could take hundreds of years to finish it, so government needs to hire skilled and highly experienced worker that can make it only in a few years ( government as employer). When the government is making the bridge itself, it is already government as producer, because he is producing something.
References: -http://en.m.wikipedia.org/wiki/Central_government
-http://en.m.wikipedia.org/wiki/Central_bank
-http://www.fetsystem.com/economic/government-as-a-producer
-corner note book
100% originality based on smallseotools
Government influence or government intervention is the regulatory actions taken by a government in order to affect or interfere with decisions made by individuals, groups, or organizations regarding social and economic matters.
ReplyDeleteThere are some ways in which the government can intervene or influence the local people. Those are:
1. Indirect Taxes: This can be used to raise the prices of de-merit goods and products that have negative externalities, such as cigarettes and drugs (marijuana,etc), designed to increase the opportunity cost of consumption and thereby reduce consumer demand towards a socially optimal level.
2. Subsidies: Government will gives some money to the company to reduce the price of merit goods. They are designed to boost consumption and output of products with positive externalities. Example of good that was given subsidy by the government is the gasoline (premium, solar, and pertamax, Pertamina was given subsidy by the government) and LPG.
3. Tax Relief: Government may offer financial help by giving tax credits to help the company in their research and development or a reduction in corporation tax that is used to promote new capital investment and employs more people.
4. Changes to taxation and welfare payments: This can be used to change the overall distribution of wealth and income. For example higher direct tax rates on rich households or an increase in the value of welfare benefits for the poor to make the tax and benefit system more progressive.
Government can act in a number of ways. It can act as the employer, producer, and it can also be the consumer. First as employer, it provides jobs for local people. Many jobs are provided for the local people who doesn't have any jobs. The government provides job such as street cleaners, teachers in government school, and many other things. Second, it can act as a producer, it produces many things that we can enjoy now. They provides electricity, toll ways, street lightning, subsidies, and other public goods. Third as consumer, besides providing or producing things for local people, government also consumes things that they needed such as goods that are produced by the farmers to protect them financially, they also consumes goods to assist suppliers to sell their goods.
However, the government intervention or government influence also have disadvantages and disadvantages. The advantages are:
1. Greater Equality – redistribute income and wealth to improve equality of opportunity and equality of outcome
2. Market Failure – Markets fail to take into account externalities and are likely to under-produce public / merit goods. For example, governments can subsidise or provide goods with positive externalities.
3. Macroeconomic intervention – intervention to overcome prolonged recessions and reduce unemployment.
Disadvantages are:
1. Governments liable to make the wrong decisions – influence by political pressure groups, they spend on inefficient projects which lead to inefficient outcome.
2. Personal Freedom. Government intervention is taking away individuals decision on how to spend and act. Economic intervention, takes some personal freedom away.
3. Market is best at deciding how and when to produce.
So in conclusion, not all people will be satisfied that the government is increasing the effectivity and productivity of the market in that country. If the government is not giving enough subsidy or not giving enough support for the market in that country, than the market will not be increasing in they effectivity and productivity.
Resources: - http://www.ask.com/question/government-to-consumer
- http://www.businessdictionary.com/definition/government-intervention.html
- http://www.economicshelp.org/blog/5735/economics/should-the-government-intervene-in-the-economy/
- http://www.tutor2u.net/economics/revision-notes/as-marketfailure-government-intervention-2.html
80% originality
In many countries the government is a major consumer of goods and services as well as providing jobs and incomes for many people. Government spending or public expenditure therefore accounts for a large share of total spending in many economies
ReplyDeleteCurrent Expenditure is recurring spending on goods and services consumed in the current financial year. These include the wages and salaries of public sector workers, state pensions and welfare payments , consumables , such as pens and paper , and the running cost of government offices. Capital Expenditures are investments in long-lived assets such as computer equipment , roads , dams , schools , and hospitals. Capital Expenditure has a lasting impact on an economy and can help to expand its productive capacity
Government will use their spending and intervere the market to achieve a number of objectives:
1. To Provide Goods and Services that are in oublic interest
2. To Invest in national infrastructure
3.To Support Agriculture and Key Industries by providing financial assistance or subsidies to firms to reduce their costs of production and make investments instaff training , new machinery , and the R&D OF NEW PRODUCTS
4.Stable Balance of Payment and high employment rate , hence low unemployment rate
5.To Manage Macroeconomy
6.To reduce inequalities in incomes and help vulnerable people
Also , by that many private sector firms are benefitted directly from different public expenditures or indirectly from their impact on consumer demand such as :
1.Construction Firms benefit from contracts to build schools and other buildings
2.Office equipment manufacturers benefit from spending on equipping public offices
3.Farms may benefit from agricultural subsidies to increase their production of food
4.Power Companies earn revenue from electricity supplied for street lights
5.The defense industry benefits from orders for defence equipment
6.Public Sectors Workers use their incomes to buy goods and services from bsiness
So Government Intervention, not only clearing objectives of government , make the society happy , also gave benefits to private sector also . So my conclusion is that Government intervention is good
thanks for the usefull information...
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