BUS 670: Week 3 DQ 1 - Assignment Example

Law Question The government could have prevented the credit crisis in 2008 if it had legislated strict regulation.During 2008, there were no regulation prohibiting the financial institution from advancing mortgages and finances to unsecured customer. The limitation of law made it possible for the financial institution to attract more customer through unsecured mortgages (Jarvis, 2011). Therefore, if the government has sound regulation and the Wall Street was more prudent, the credit crash would have been prevented.

For this reason, the Federal Reserve may have raised a caution on the loopholes in regulation for government to stiffen requirement for a person to get a mortgage. This could have maintained the market for houses for the long whole. Question 2Though in business the principle of the free market is paramount for a thriving economy (Goel, 2006). Therefore, for business too much regulation hinder operations of the enterprise. And because government regulate by imposing tax it is thus difficult for businesses or corporation to engage in trade while much of the profit will go to the government.

However, government regulation are encouraged to counter the negative externalities of businesses. Therefore, it is the duty of government to ensure that it regulates in areas where the free market may affect a third party not involved in businesses (Goel, 2006). This is the case with the financial crisis of 2008. If the government had checked, the flows of the Wall Street more losses would have been prevented. Therefore, government regulation are for the inordinate good of the civilisation. One of the effects of industrialization and mass production is increased pollution.

The effect of pollution affects other people not involved in the production and consumption of goods. For this reason, there is need to mitigate the effect of pollution to the third party. This is best done through sin tax to discourage pollution as well as to fund effect of pollution to the people and the environment. ReferencesGoel, P. (2006). Business Law For Managers, 2006-07 Ed. New Delhi: Dreamtech Press.Jarvis, J. (Director). (2011). The Crisis of Credit Visualized - HD [Motion Picture].