Regulation of Business Flashcards
The two types of influence that government has on business are __________ and nonregulatory.
regulatory
The two policy tools that that government uses to influence business are privatization and __________ policy.
industrial
Explanation
These are both nonregulatory measures.
Many have been calling for a reduction in size of the federal government. One option is _____________, to turn parts of the government over to private companies.
privatization
Explanation
This is known as privatization. Private companies, which are working for profit, tend to be smaller and more efficient than the government bureaucracy.
Industrial policy can be defined as coordinated _________.
targeting
Explanation
It is the selection of firms, projects or industries for special treatment, which is combined with a government plan to influence industrial structure in specific ways.
When US auto makers lobby the government for tariffs on foreign imports and reduced taxes for themselves they are asking for an __________ policy.
industrial
There are 5 schools of thought concerning __________ policy
industrial
Explanation
The 5 schools are as follows: accelerationists, adjusters, targeters, central planners and bankers.
________________ want to back winners in sunrise industries.
Accelerationists
Explanation
Sunrise industries is another way of saying “high-tech.” They want to accelerate changes already indicated by the marketplace.
Adjusters would offer assistance to ______ industries in exchange for assurances that they would offer retraining and relocation assistance to employees, modernize and reduce waste.
sunset
Explanation
Mass production industries, such as automobiles and steel, are examples of sunset industries.
_________ would focus on a select group of industries to transform them into engines for economic growth.
Targeters
Explanation
For example, finance, medical equipment, agriculture, industry, etc.
Central planners would tie industrial policy more closely with _____________ policies.
macroeconomic
Explanation
Examples of real world centrally planned economies include the economies of North Korea, Cuba and the former Soviet Union.
The bankers school of industrial policy advocate a Federally-backed __________ development bank.
industrial
Explanation
The Sherman Antitrust Act was written in rather vague terms, so the _______ Act was passed in 1914 to limit specific activities that tend to reduce competition.
Clayton
Explanation
The Clayton Act of 1914 prohibits price discrimination, tying and exclusive agreements, and the acquisition of stock in another corporation when the result is to substantially lessen competition or create a monopoly.
The Federal Trade Commission Act of 1914 created a federal agency which regulates marketing practices and prohibits unfair methods of ___________.
competition
Explanation
The Federal Trade Commission Act, passed in the same year as the Clayton Act, created the Federal Trade Commission to investigate and enforce laws such as the Sherman Antitrust Act and the Clayton Act.
The Federal Trade Commission Act (1914) is a famous example of ______ legislation, intended to prevent individual companies or groups of companies from gaining control of markets in ways that restrain competition or harm consumers.
antitrust
Explanation
Other famous examples of antitrust legislation include the Sherman Antitrust Act (1890) and the Clayton Antitrust Act (1914). Such regulations sought to break up the power of huge companies such as Standard Oil.
_________ succeeded Theodore Roosevelt as President, and during his administration filed twice the number of antitrust suits as Roosevelt, including one against Standard Oil, whose break up was ordered by the Supreme Court in 1911.
William Taft
Explanation
William Howard Taft more vigorously enforced anti-trust legislation, although Theodore Roosevelt was the one known as the ‘trustbuster.’ Standard Oil was broken up under the Sherman Antitrust Act in 1911.