Business Questions and Exercises uestions for Analysis 1 On

Questions and Exercises uestions for Analysis 1. On various occasions, government provides finan- cial incentives to business firms. For example, the Canadian government provided export assistance to Bombardier Inc. with its Technology Transfer Program. Is this consistent with a basically free market system? Explain how this might distort the system.

Solution

The idea of providing assitance to business is to

Now if there are no proper policy and checks in place there are chances these assistance will be abused by various business firms in lieu of money.

So there is a possibility that corrupt companies and government officials will use these to make more money and use tax payers money to their advantage.

And this if not followed well could lead to a lopsided market practice and the system will be fully corrupt and get distorted. So, proper checks and authorizations with media publications are always essential to prevent any mis handling and preventing corruption.