Bachelor of General Studies (BGS) Degree Practice Exam

What is the primary role of government in relation to business and society?

1. To create a monopoly

2. To balance the relationship between business and society

3. To eliminate competition

4. To regulate prices

The correct answer is: To balance the relationship between business and society

The primary role of government in relation to business and society is to balance the relationship between the two. This encompasses ensuring that businesses operate fairly while also protecting the interests of the public and maintaining a stable economy. By establishing laws, regulations, and policies, the government aims to promote fair competition, protect consumers, and ensure that businesses adhere to ethical standards. This balancing act is crucial in fostering an environment where businesses can thrive without infringing upon the rights or well-being of society. For instance, regulations may impose restrictions to prevent monopolistic practices or exploitative behaviors, ensuring that the economy remains competitive and equitable. In contrast, creating a monopoly would undermine competition, while eliminating competition outright would hinder innovation and choice in the marketplace. Regulating prices can be one function of government but does not encapsulate the broader aim of establishing a balanced relationship that monitors and adjusts to the dynamics between business practices and societal needs. Thus, the government’s primary role is indeed to create and maintain a harmonious balance between business interests and societal welfare.