ZIMSEC O Level Business Studies Notes:Reasons why the government regulates Business activity
Forms of government
- There two major forms of government in Zimbabwe:
- The local governments in the form of councils either urban or rural
- The main national government
- There are other laws which apply by virtue of treaties, SADC regulations, the African Union and United Nations
Reasons why governments intervene in the affairs of business
- There are several reasons why the State might intervene in business affairs and regulate businesses.
- This State may do this in order to:
- To raise taxes to fund its public spending as well as other government operations
- To prevent the formation of monopolies and check their power.
- To internalize the social costs of businesses.
- To control the rate of inflation.
- To reduce unemployment.
- To ensure that wealth is equitably distributed.
- To prevent strategic technology from falling into the hands of rival states.
- To achieve a favorable balance of payments
- To prevent racial, gender and other forms of discrimination.
- To prevent unfair employment practices
- To achieve gender balance
- To prevent the dumping of toxic chemicals into rivers or populated areas
- To prevent environmental degradation
- To promote the development of under developed areas
- To protect the country’s moral fabric.
- To protect local industries from foreign competition.
- To prevent the exploitation of customers
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