Government competition policies relating liberalization

GRIN Verlag
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Essay from the year 2006 in the subject Business economics - Economic Policy, grade: 4,0 (gut), University of Pécs (Faculty of Business and Economics), course: Business Economics, 13 entries in the bibliography, language: English, abstract: “Almost all market competitors are firms – business organizations (social groupings) that are, for the most part, internally cooperative, not competitive. Firms are the principal suppliers and buyers of most products and services, while consumers (households) generally buy only final goods (...). Typical market transactions involve competition among firms. Many of these firms, including subtypes such as labour unions, can legally own and exchange property and differentiate and isolate their legal liability as a group from the inability of their members.” The competitive-cooperative market system is controlled by formal social regulations we call competition policy. This term refers to the body of laws of a state which govern the extent, and ability, to which bodies can economically compete. They hence to restrict practises that can pull down market competition such as monopoly or cartel. Most nations have an own legal competition framework, and there is a general agreement on what is and what is not acceptable behaviour. “In general, liberalization refers to a relaxation of previous government restrictions, usually in areas of social or economic policy. (...) Most often, the term is used to refer to economic liberalization, especially trade liberalization or capital market liberalization, policies often referred to as neoliberalism. One of the world’s most open trade ad investment regime is the one of the United States. However, a liberalized and deregulated market has to be supported by rules of the game to ensure competition. But although economic liberalization often is associated with privatization, the two can be quite separate processes. As an example, in the European Union the gas and electricity markets were liberalized a few years ago, instituting a system of competition; but some of the leading European energy companies (such as EDF or Vattenfall) remain partially or complete in public ownership. “Liberalized and privatized public services may be dominated by just a big few big companies, particularly in sectors with high capital costs, or high sunk cost, such as water, gas and electricity. In some cases they may remain legal monopolies, at least for some part of the market” (i.e. parts of postal service in Germany a few years ago).
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Publisher
GRIN Verlag
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Published on
Dec 5, 2007
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Pages
17
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ISBN
9783638871235
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Language
English
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Genres
Business & Economics / Economics / General
Political Science / Public Policy / Economic Policy
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Content Protection
This content is DRM protected.
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Eligible for Family Library

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Essay from the year 2007 in the subject Business economics - Economic Policy, grade: 4,0 (gut), University of Pécs (Faculty of Business and Economics), course: Corporate Finance, 26 entries in the bibliography, language: English, abstract: Two fields of policy have a strong impact on a national economy and its development. The first of the two policies that are designed to supplement each other, falls into governments responsibility, more exactly it is formulated by the minister of finance. This one is fiscal policy. The second one, monetary policy, is designed by the national bank. For making clear the difference between both I would like to explain both policies as an introduction to the topic of this paper. “The government’s choice of tax and spending programs, which influences the amount and maturity of government debt as well as the level, composition, and distribution of national output and income. Many summary indicators of fiscal policy exist. Some, such as the budget surplus or deficit, are narrowly budgetary. Others attempt to reflect aspects of how fiscal policy affects the economy. For example, a decrease in the standarized-budget surplus (or increase in the standarized-budget deficit) measures the short-term stimulus of demand that results from higher spending or lower taxes. The fiscal gap measures whether current fiscal policy implies a budget that is close enough to balance to be sustainable over the long term. The fiscal gap represents the amount by which taxes would have to be raised, or spending cut, to keep the ratio of debt to GDP from rising forever. Other important measures of fiscal policy include the ratios of total taxes and total spending to GDP.” In the way of deciding about the amount of expenditures and premises for spending, fiscal policy is an important tool for government for setting macroeconomic conditions.
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