Question

Discuss how government intervenes in the success and failure of businesses. Are there any recent news events that can support your position?

Answer 1

The government can exert a lot of influence on a business which could lead to its success and failure. Some of the methods to the same are increasing or decreasing the tax rates, making a favorable environment for exports and sale in the domestic market, ease of doing business or regulation which promote business activity etc. Let's see some of these points in detail.

Increasing and decreasing taxes: A government can increase or decrease the taxes in the country to stimulate the business activity. If the taxes are more the companies will have less profit and it will also reduce the investment activity in the nation. If the taxes are low easy profit for the business will lead to more borrowing, more hiring, and expansion of the business.

Export and domestic demand environment: Government can make better agreements to promote exports benefiting the business in the home country.It will include free trade agreements to putting tariffs on the import of several goods and services in the country.

Ease of doing business: Ease of doing business is a measure of how easy it is to operate in the country. More laws and regulations will make it difficult for the businesses to operate.

Yes, one recent incident to support my position is Trump administration proposing a corporate tax cut to increase investment and business growth in the country.