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The Role of Government in the Economy - Coggle Diagram
The Role of Government in the Economy
Promoting a stable market
A monopoly is when a company or a group has complete control over a product or a service.
Monopolies are a bad thing because they cut out competition, the company/group can set the price of a service/product, and there is less of a incentive to create good products.
An example of a monopoly is De Beers Consolidated Mines.
Ensuring the safety of the consumer
The CSA ensures that products meet industry standards for safety.
Product recalls are when a product gets taken off the market and the consumer is able to get a refund or their product repaired for free.
Health Canada sets regulations for companies that produce goods for human consumption. They make sure that companies clearly show the nutritional value of a food on the packaging.
Environmental protection
The regulations can make sure that companies and businesses do not pollute freely. An example of this is when forestry companies harvest trees from public land they have to pay to have the land re-planted with trees.
Environmental protection is important because it makes sure that companies and businesses meet environmental protection standards.
Labour Laws
Labour laws are important because they make sure that workers can get paid minimum wage, limit weekly work hours, the right to refuse unsafe work, mandatory breaks, and many more.
Labour laws are laws that protect worker and employer rights.
Crown Corporations
Some examples are Canada post, CBC, and the bank of Canada.
Crown corporations are owned by federal or provincial organizations that are structured like individual businesses. They exist to promote Canadian culture and identity.
Prevent price fixing
The competition act prevents price fixing.
Price fixing is when a couple companies agree to raise the price of supply and products to get more money. An example of this is municipal infrastructure contracts.
Drawbacks of government involvement in the economy
Waste-
When you spend money on something that is not need. For example Trudeau spent money on programs that do not work. Link-
https://torontosun.com/opinion/columnists/trudeau-government-wasting-10-7-billion-this-year-funding-programs-that-dont-work-report
Inefficiencies
- Government employees are often well paid and have good job security. This can cause them to be lazy and inefficient at their jobs.
The government has a lot of power but it can become corrupted easily. It is against the law for government officials to use private information to gain profit. Some examples are bribery, embezzlement, and extortion.