There are several policies and regulations that are established by the government. These things play a critical role in guiding a business. Some rules such as minimum wage are mandatory while some policies could indirectly influence businesses.

Businesses have to be flexible to be able to react to these changing policies and rules.

A Guide for Country’s Economy

This is true not just at national level but also, on local level. It is due to the reason that municipalities and states have their sets of rules. Without a doubt, there are international treaties too that could affect how businesses conduct their operations.

The government is capable of implementing policies that may change social behavior in business environment. To give you an example, the government may levy taxes by using carbon-based fuels as well as grant subsidies for businesses that are using renewable energy. Furthermore, the government may underwrite development of new technology that’ll bring positive changes.

Hitting the Balance

Likewise, duty and tax exemptions on a given sector may trigger investment in it and it could generate harbor growth. It could be shown on high tax rates that are placed on imported goods. This is actually challenging and encouraging local production of same goods. However, the high tax rates for raw materials might just hamper domestic production. Thus, having a policy is integral to strike balance.