Marginalization of companies is the coming together of two or more companies that offer similar goods and services to form one legal entity. Several companies merge for the maximization of profits from their products, and reduce competition from other companies that perform similar duties. Over the years, several fashion companies have merged in the fashion industry. However, government involvement in the market economy aids in controlling and protecting both the consumer’s and the fashion industry itself. Role of government in market economy
Government plays a crucial role in the market economy by ensuring the laws and regulation are abide by, and control the production of the private sectors, although, over the years its efforts in controlling such economies are minimal and insignificant. Market forces of demand and supply play a major role in setting trends that such market economies follow. Economic growth, inflation, interest rates, wage rates of workers and unemployment rates are some of the fields the government takes part in controlling, to boost the Gross National Product (GNP) of the state.
The government solely protects the rights of the employees and consumers and offer of public goods. Government spending and expenditure are one way by which the government control market economies, with increased spending to increase cash flow in the economy, and increased expenditures to minimize cash flow in the economy. Such increases spending and expenditures aid in the control of inflation rates in the economy, in order to stabilize the fluctuating currency. This can be achieved by controlling the inflation rates and ensure price stability in all products produced, to benefit both low and high income earners.
Government spending and expenditure involve payment of taxes to and fro manufacturing industries, transfer payments, subsidies to various fashion institutions, transfer payments from the working in fashion industries to the...
Please join StudyMode to read the full document