BUS 345 Chapter 11 – Flashcards
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The level of government regulation of business has always been low.
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Regulating the way business operates is only one of several roles the government has in its relationship with business.
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Our goals for business focus solely on the production and distribution of goods and services.
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The relationship between government and business has become adversarial, but is improving.
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The relationship between goverrnnent and business is limited to government's influence over business.
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Proponents of privatization want goverrnnent to be a producer of services.
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Advocates of privatization base their positions on the need for efficiency and overall performance.
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One of the most direct ways in which government influences business is through transfer payments.
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When providing loan guarantees for business, the government actually transfers the money to the business.
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The monetary policy set the Federal Reserve System is completely independent of the influence of other branches of goverrnnent.
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In many ways the most controversial aspect of the government/business relationship is regulation.
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Government regulation generally arises out of some type of market failure.
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Many government regulations over business have been created by the efforts of special interest groups.
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Negative externalities are the additional costs incurred by business due to the outside regulations placed by government.
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Keeping people informed is an important social goal of government.
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Early economic regulations and the government bodies that administered them were usually formed along industry lines.
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The new social regulation focuses on business's impacts on other businesses.
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Newer social regulations covers business practices in all industries.
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Deregulation has provided uniform benefits for all parties affected.
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One of the recurring problems in industries that have been deregulated is that they tend to become dominated by a few firms.
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Government intervention in business began with
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a push for tariffs.
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The reason that the United States government passed anti-trust legislation was
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due to the anti-competitive practices of some large trusts.
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Government's new role in its relationship with business during the New Deal era was one of
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restoring prosperity and promoting economic growth.
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Most Congressional legislation before the 1950s that affected business was
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economic in nature.
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After the 1950s, most Congressional legislation that affected business was
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concerned largely with the quality of life.
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Modern goals for business include all of the following except
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promoting the social welfare
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The clash of ethical systems between government and business is centered around
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individualist and collectivist ethics.
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Business generally follows the ethic of
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individualism
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Government is generally thought to follow the ethic of
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collectivism
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Which of the following is not mentioned as a frustration executives have with government officials, according to a recent McKinsey survey?
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Concerned that government aims to redistribute the balance of wealth
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Which of the following is not a method that government uses to influence business?
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lobbying
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The public and government use all of the following methods of influencing each other except
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coercion
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Every form of state intervention that affects industry as a distinct part of the economy is called
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industrial policy
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The question of whether current public functions should be performed by the government or private sector is addressed by
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privatization
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Arguments for industrial policy include all of the following except
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stifling innovation.
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Arguments against industrial policy include all of the following except
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The need to rescue "sunset" industries.
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A strong industrial policy:
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helps firms compete in a fast-moving global economy.
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Industrial policy is:
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a powerful nonregulating approach by government to influence business.
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There has always been a strong reaction in the United States to any form of industrial policy because:
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It conflicts with the widely held view of government's role in the economy.
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The opposite of privatization could be considered
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federalization
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Government influences business through all of the following nonregulatory methods except
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requiring equal employment opportunities be granted to job applicants.
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Government payments to industries or groups with special qualifications are called
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subsidies
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Government attempts to persuade business to act in the public interest are called
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moral suasion.
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All of the following are reasons that government regulation of business is needed except
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maintain competitive markets.
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Government regulations have been criticized for all the following reasons except
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being ineffective.
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The act of governing or bringing under the control of law or constituted authority is called
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regulation
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The primary reason for government regulation of business is
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market failure
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Which of the following is not a major reason given for governmental regulation?
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maintaining a trade surplus with foreign countries
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A market in which the economies of scale are so great that the largest firm has the lowest costs and is able to drive out competitors is called a(n)
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natural monopoly.
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Government intervention in monopolistic industries is often brought about by
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anticompetitive practices.
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Negative externalities are often referred to as
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social costs.
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Government regulation of business through the control of economic or market variables is a form of
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economic regulation.
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Governmental regulations that seek to further societal objectives are examples of
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social regulation.
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Social regulation's focus on people encompasses their roles as all of the following except
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business owners
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The newest type of social regulations is concerned primarily with
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security
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The dilemma of regulation is the tradeoff between
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effective control and the burden placed on firms.
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Which of the following is not considered a part of the induced costs of regulation?
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the effect on consumers
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The primary purpose of deregulation is to
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remove certain industries from old-line economic regulations.
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The dilemma of deregulation is
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to enhance competition within the industry without sacrificing applicable social regulations.
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Which of the following industries has not been affected by deregulation?
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computer software
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Which of the following is not a role increasing government's complex relationship with business?
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government cannot have buying power
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Which of the following is not a concern expressed by executives about government involvement in business?
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U.S adults said government should do more
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The newer form of industrial policy is exemplified by:
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Robert Reich's book, "American Frontier."
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Arguments against privatization include all of these except:
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service provisions.
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Which of the following is not an effect of induced costs?
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new agencies may be created.
