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Summary ECOCB535 Comp2 Mod4 Reflection.doc Comp 2/Module 4 - Reflection University of Phoenix ECOCB/535: The Digital Economy Comp 2/Module 4 “ Reflection The US government plays a large role in economics and financial markets. The government has the abilit$4.99
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Summary ECOCB535 Comp2 Mod4 Reflection.doc Comp 2/Module 4 - Reflection University of Phoenix ECOCB/535: The Digital Economy Comp 2/Module 4 “ Reflection The US government plays a large role in economics and financial markets. The government has the abilit
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ECOCB535 Comp2 Mod4 R Comp 2/Module 4 - Reflection University of Phoenix ECOCB/535: The Digital Economy Comp 2/Module 4 “ Reflection The US government plays a large role in economics and financial markets. The government has the ability and lawful right to influence the economy. This is do...
ecocb535 comp2 mod4 reflectiondoc comp 2module 4 reflection university of phoenix ecocb535 the digital economy comp 2module 4 “ reflection the us government plays a large role in economi
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Comp 2/Module 4 - Reflection
University of Phoenix
ECOCB/535: The Digital Economy
, 2
Comp 2/Module 4 – Reflection
The US government plays a large role in economics and financial markets. The
government has the ability and lawful right to influence the economy. This is done through
passing legislation governing the market, overseeing the availability of goods the private sector
does not provide, and controlling income distribution (McConnell et al., 2018). Interventions in
economic activity by the government are meant to balance and stabilize it; however, this often
does not work according to plan. There are many times where the government fails to improve
economic activity or a particular situation and actually makes it worse. There are many reasons
why this might happen, but most pertain to the nature of how the government operates and
breaks from public interests. Two examples of how the government’s intervention in an
economic situation failed are railroad regulation and government owned public companies
(McConnell et al., 2018).
Railroad Regulation
The government established a railroad regulation entity known as the Interstate
Commerce Commission, ICC, over a hundred years ago to address the growing concerns of
unfair and monopolistic pricing in the railroad industry. There were only a few railroad
companies and limited destinations at the time leading to excessive railroad rates. The ICC was
formed to regulate competition and pricing in the industry to better serve the public as the
industry was quickly gaining in popularity for shipping and transportation (McConnell et al.,
2018).
Unfortunately, executives from the larger railroad companies were able to influence
policy set by the ICC as the industry grew which prevented fair competition and guaranteed
profitability. The companies attained regulatory capture of the industry. This could have
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