GCSE Business Practice Exam 2025 – Complete Study Resource

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What is the primary role of government regulation in business?

To fund private companies

To establish rules for fair competition

The primary role of government regulation in business is to establish rules for fair competition. By setting regulations, the government creates a level playing field where all businesses can compete fairly. This helps to prevent monopolies and anti-competitive practices that can harm consumers and other businesses. Fair competition is crucial because it encourages innovation, improves product quality, and leads to better prices for consumers.

While government regulation may involve aspects like controlling prices or managing employment rates, those are secondary functions aimed at ensuring market stability and protecting consumers or workers. The foundational premise of regulation is to ensure that all market players adhere to certain standards and laws, fostering an environment where competition can thrive.

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To control prices in the market

To manage employment rates

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