Question

Compare regulatory controls and economic incentives. Do we need both?

Answer 1

Regulatory controls are a type of restriction that has to comply with the requirements of a regulatory agency in order to operate an enterprise. In the basic sense, a law is a legal rule governing a company's particular social or economic activity.

Example: Controlling act or statute, rule or order is the act of regulation. The control over the selling of tobacco is an example of a regulation. A law which prevents alcohol being sold in some places is an example of a regulation.

Economic rewards drive you to action, while your wants, expectations and wishes are preferences. You are motivated to follow your interests through economic opportunities.

Example:

• Subsidies
• Tax Incentives
• Financial Incentives

Both are important in different aspects. Depending upon the situation government imposes either regulatory control or provide economic incentives.

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