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Government Involvement in the Economy - Coggle Diagram
Government Involvement in the Economy
Promoting a Stable Market
Monopoly
One company controls an entire market or product
No competition exists
The Cons Of a Monopoly
Higher prices for consumers
Less choice
Lower quality products (no competition pressure)
Example of monopoly
Microsoft (historically in software market)
Standard Oil (historical oil monopoly)
Ensuring Safety of Consumers
Health Canada
Regulates food, drugs, and health products
Requires warning labels and nutrition facts
Canadian Standards Association
Tests products for safety standards
Certifies electronics, appliances, equipment
Product recalls
Government removes unsafe products from market
Consumers get refunds, repairs, or replacements
Labour Laws
What they are
Rules that protect workers and employers in workplaces
Why they are important
Ensure fair wages (minimum wage)
Safe working conditions
Limits on working hours
Right to refuse unsafe work
Environmental Protection
Why it is important
Prevents pollution and climate damage'
Protects future generations
Keeps ecosystems balanced
Example of regulation
Limits on factory emissions
Rules on dumping waste
Carbon taxes on pollution
Crown Corporations
What they are
Government-owned businesses that provide public services
Why they exist
Provide services private companies may not profit from
Support infrastructure and public needs
Examples
CBC (media and broadcasting)
Canada Post
Hydro companies
Prevent Price Fixing
What is price fixing
When companies secretly agree to set prices at the same level
Removes real competition
Example
Gas companies agreeing to all raise fuel prices together
Law that prevents it
Competition Act (Canada)
Drawbacks of Government Involvement
Government corruption
Officials misuse power or insider information
Example: insider trading
Waste and inefficiency
Government systems can be slow
Less pressure to compete = less efficiency
High costs due to bureaucracy