CXC Principles of Business Exam guide: Section 8: The Role of Government in an Economy

Outline the responsibilities of government in an economy;

Responsibilities of government in an economy:

(a) security of the State;

(b) protection and general welfare ofcitizens;

(c) job security and severance benefits to workers;

(d) protection of the environment

(e) maintenance of a safe environmentfor investors

Adherence by business to laws, including laws governing taxation, labour and the environment.

Describe measures used by governments to protect consumers;

Consumer protection legislation, including regulations on price controls, food and drug standards, hire purchase legislation.

Identify ways by which government regulates business activity;

For example, by divising laws related to zoning and the disposal of waste.

The role of taxes in raising revenue, income distribution,and control of spending.

Direct taxes and indirect taxes.

Distinguish between progressive, regressive and proportional taxation;

Concepts of progressive, regressive and proportional taxation.

Forms of government assistance to business, including institutions for lending capital, training and technical assistance, research and information centres, subsidies and grants.

Evaluate the impact on the country with respect to social services provided by government.

Impact of socal services provided by government:

(a) healthcare - a healthy population

(b) National Insurance Scheme -provision and security for the elderly;

(c) education - an informed and literate population;

(d) roads and transportation - access to goods and services