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Reevaluating Government Regulation in the Economy

Question

Discuss whether or not an economy would benefit from less government regulation.

Category:

Public Finance and Government Intervention

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Preview Answer

I. 🍃Introduction
- Brief explanation of the topic
- Importance of discussing the pros and cons of deregulation

II. Pros of Deregulation
- More freedom
- Less red tape/bureaucracy
- Easier to set up new firms
- More competition
- Decrease cost of production
- Decrease price, including exports
- Increase quantity demanded
- Increase total revenue
- Increase profits
- More investments
- Increase demand for labour
- Less unemployment
- Decrease current account deficit
- Increase aggregate demand
- Increase economic growth
- More control over prices resulting from removal of maximum price

III. Cons of Deregulation
- Less labour regulations would reduce job security
- More exploitation of workers, e.g. lower wages/longer working hours
- More inequality
- Less environmental regulations would increase pollution, e.g. air pollution/water pollution
- Health standards of society reduces
- Less antitrust/anticompetitive regulations will create monopolies
- Small firms can't compete
- Higher prices
- Less protection of domestic firms from e.g. embargo
- Domestic firms may go out of business
- Discourage consumption of harmful products, e.g. smoking ban
- External costs may be ignored, e.g. air pollution, noise
- It may mean that there is less consumption of beneficial (merit) goods, e.g. compulsory state education

IV. 👉Conclusion
- Summary of the pros and cons of deregulation
- Importance of balancing the benefits and drawbacks of deregulation
- Final thoughts on the topic.

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