Government Intervention to Control Interest Rates

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Given the current state of the U.S. economy, the government has rolled out a plethora of actions to encourage business activity over the past couple of years. The Federal Reserve altered the Federal Funds Target Rate (Interest Rates) to encourage businesses to obtain loans for expansions. When the interest rates are low, businesses that look to expand tend to generate more profit from the expansion as a direct result of the lower interest rate. The government also uses loans and grants to directly encourage entrepreneurs to press forward with starting their business venture. While the federal government provides loans and grants, some state governments offer loans and grants as well. State offered assistance comes with the requirement that the loan or grant be used for a start-up business that is headquartered in that particular state.
Federal and state governments can also limit business activities. The end goal of the limitations is to ensure that consumers and employees are protected from unregulated commerce and exploitative practices. A few examples of these regulations is the Anti-trust Law, The Federal Trade Commission and the Environmental Protection Agency.