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The Role Of Government In The Economy : - Coggle Diagram
The Role Of Government In The Economy
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Promote A Stable Market: Monopolies
What is a monopoly? When a company or group has exclusive control over the supply of a product or service, it’s called a monopoly. Due to this exclusive control, a monopoly market does not have to face any competition and is the only seller of the product or service.
Examples of monopolies are...
Monopolies are disadvantages in our economy for a number of reasons including the high prices they bring, no competition, and therefore less incentive to create better-made products. Monopolies can set whatever prices they want which results in having high prices and because monopolies have control over the supply, there will be no other competition for that good. If it will be only the monopoly selling the product or good, there will be no reason for them to create a different variety of the product due to lack of competition making the product sloppy or not up to date.
Ensuring The Safety Of The Consumer
The CSA’s roll is to make sure our products are safe to use and that the products that are sold meet the industry standard for safety. To do this companies like the CSA will take products and put them under severe testing and maybe even science tests.
A recall for a product is when consumers are allowed to have their purchase repaired for free or get a refund. This is because companies like the CSA can’t be checking every single product being made so products might make slips and the product that isn’t safe might enter the market. The government can force companies to issue recalls like when you see “money back guarantee “ on products.
The role of Health Canada is to ensure the goods that we consume are safe to keep on consuming by requiring companies to address risks and nutrition on the products. For example, cigarette companies must clearly warn people of the dangers of smoking and nutritional value displays must be clearly seen on food.
Labour Laws
These laws are important because they protect workers. Without them, unfair treatment would go on in the workplace that could potentially ruin someone's life, like if you fired them in the middle of the afternoon without telling them why. Without labor laws to look into workplace accidents workers might repeat these accidents at a later time and cause easily avoidable problems for not only workers but maybe even consumers. For example, if a Walmart had a sign for 50 years and the sign started falling on cars, another Walmart that has had a sign for almost 50 years doesn’t check on the sign for rusting and other issues then the sign will fall even though it could have been avoided.
Labour laws are workplace laws that protect the worker's rights and the workers. For example minimum wage, you can’t pay a worker under a specific amount of money or investigate workplace accidents and injuries.
Environmental Protection
Environmental protection is important because an ecosystems resources are scarce, sure you can make more but it takes a long time to grow and become the environment it was before. This means if we are not careful with how we harvest the environment around us there is a possibility of running out of that ecosystem. Those ecosystems are much more then just one product because an ecosystem is community of things living together, from one you can make the wood necessary for houses and hunt the meat needed to make your stew and more. If taken advantage of, ecosystems can be destroyed leaving many organisms homeless which ultimately not only ruins the view of nature but also ruins the Earth by increasing the chance of organisms going extinct. However because we still need those products we find ways to work around this problem. As an example forestry companies harvest trees and after they finish, they must pay to have the land replanted so our forests continue to have trees to live in.
Crown Corporations
Crown corporations are provincially or federally owned businesses that provide specific goods and services to citizens and might also promote the culture and identity of Canada. These businesses are almost like private businesses but they do not profit off of the goods and services and instead use tax dollars to pay for what's needed to create the service or good. A few examples of crown corporations are CBC and Canada Post. CBC is created to share the news with the citizens of Canada and Canada post covers postal services for the people of Canada.
Prevent Price Fixing
Price fixing is when similar brands decide to inflate their prices to increase profit, going against the law of supply and demand. If Apple, Android/Samsung and Pixel all decided to increase the price of their devices to increase profit, it would be considered price fixing.
Consumers are protected from companies price fixing because of the competition act that promotes competition and ensures the best price for consumers.
Drawbacks Of Government Involvement In The Economy
Insider trading is when government officials use private information not yet released to the public to gain some kind of profit. An example of insider trading is the senator virus scandal when Richard Burr a senator uses his early privately given information about the pandemic to make stock trades. He had discussed issues of the pandemic in private but in public, he voiced that everything was going to be fine and that the United States were prepared when he knew that was not true.
Government employees have a reputation for being sloppy or lazy in their work because they have a secure job that pays really well. They become inefficient with their work which is why people have suggested making crown corporations privatized. Privatized companies are based off profit so you must be efficient to be competitive and profitable.