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APA
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Law
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English (U.S.)
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Topic:

Government Intervention Can Impact the Economy Only

Coursework Instructions:

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According to the tools that the government use to help encourage business activities are lower interest rates, for small businesses, give tax incentives, friendly trade policies, providing contract work to private companies, and grants, loans and discounts. The government can implement a policy that changes the social behavior in the business environment. For example, the government can levy taxes on the use of carbon-based fuels and grant subsidies for businesses that use renewable energy. The government can underwrite the development of new technology that will bring the necessary change. Imposing on a particular sector more taxes or duties than are necessary will make the investors lose interest in that sector.
Similarly, tax and duty exemptions on a particular sector trigger investment in it and may generate growth. For example, a high tax rate on imported goods may encourage local production of the same goods. On the other hand, a high tax rate for raw materials hampers domestic production.Governments get money to spend from taxation. Increased spending requires increases in taxes or borrowing. Any tax increase will discourage investment, especially among entrepreneurs, who take the risks of starting and managing businesses. Increased spending also eats into the limited pool of savings, leaving less money for private investment.
Reduction in private investments shrinks production of goods and services. That, in turn, may lead to the elimination of jobs.Government policy can influence interest rates, a rise in which increases the cost of borrowing in the business community. Higher rates also lead to decreased consumer spending. Lower interest rates attract investment as businesses increase production.
The government can influence interest rates in the short run by printing more money, which might eventually lead to inflation. Businesses do not thrive when there is a high level of inflation.
Reference: https://smallbusiness(dot)chron(dot)com/effects-government-policies-businesses-65214.html
https://smallbusiness(dot)chron(dot)com/ways-can-government-encourage-business-activity-2282.html

Coursework Sample Content Preview:
Government Intervention Can Impact the Economy Only 
The government uses various interventions to enhance sustainable and stable economic growth, including taxing, tax incentives, conducive trade policies, and spending powers. For example, tax and duty exemptions on a sector of the economy trigger investment in the specified industry, thus leading to economic growth (Ingram, 2019). On the contrary, increased government expenditure requires increased taxation and borrowing to finance capital-intensive projects. Accordingly, increased government expenditure diminishes the limited resources, leaving little funds for private investment, which shrinks the products of goods and services (Williams, 2019). In this vein, it can be inferred that government intervention to spur economic growth results in trade-offs that make it challenging to achieve an ideal state or target for the different economic variables such as interest rates, inflation, and economic growth.<...
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