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Government Involvement In The Economy, Drawbacks With Having Government…
Government Involvement In The Economy
Prevent Price Fixing
An Example Of Price Fixing/What it is?
The government can ensure companies cannot fix their prices to be askew from normal market forces
For example, if several gas stations agree to set their prices at the same level, it would be considered price fixing.
In Canada, the Competition Act protects consumers from price-fixing practices by prohibiting agreements between competitors that prevent or lessen competition substantially.
Envirnonmental Protection
Importance
Environmental protection is crucial for preserving natural resources, preventing pollution, and maintaining a healthy planet for future generations.
Example of environmental regulation on businesses
Regulations may include limits on emissions from factories, requirements for waste management and recycling, and guidelines for sustainable resource use.
Promoting A Stable Market
What Is A Monopoly
A Monopoly is when a company or group has complete control over the supply of a product or service.
Why Are They Bad?
They can set any price they choose
They can supply inferior products
They can lose any incentive to innovate
They create inflation
Example Of A Monopoly
Labour Laws
What Are Labour Laws?
Labour laws are regulations that govern the relationship between employers, employees, and labor unions. They cover issues such as wages, working conditions, and employee rights.
Why are They Important?
Labour laws help ensure fair treatment of workers, promote safe and healthy workplaces, and provide instructions for resolving disputes between employers and employees.
Ensuring The Safety Of The Consumer
What Is The Role Of Health Canada
Health Canada is responsible for helping Canadians maintain and improve their health by regulating products like pharmaceuticals, medical devices, and consumer products to ensure their safety, efficacy, and quality.
What is The Role Of The CSA
The CSA helps ensure the safety of products ranging from appliances to industrial equipment.
Product Recalls
Governments cannot oversee production; products that are not safe can slip into the market. If they do, the government can force the company behind the product to issue a recall on the product in question. When a recall is issued, the consumer is often able to have their product repaired to receive a refund.
Crown Corporations
What Are They And Why Do They Exist?
Crown corporations are government-owned entities established to operate in the commercial sector on behalf of the government. They exist to provide essential services, improve economic development, or manage natural resources.
Examples
In Canada, examples of crown corporations include Canada Post and the Canadian Broadcasting Corporation (CBC).
Drawbacks With Having Government Involvement In The Economy
Government Corruption
Government involvement in the economy can lead to corruption and collusion, where government officials and businesses conspire to gain unfair advantages.
Examples
Bribery, kickbacks, and favoritism in awarding contracts.
Waste And Inefficiencies
Government employees are often well paid and have good job security. This leads some to become lazy and inefficient at their job.