Government regulations impact business and economic policies by establishing the rules within which markets operate. Regulations influence aspects such as competition, consumer protection, and environmental standards, impacting how businesses function and make decisions. For instance, stringent regulations may elevate operational costs but can protect public welfare. Conversely, reducing regulations can stimulate economic growth by promoting entrepreneurship and investment. The balance between regulation and free-market principles is crucial as governments attempt to maintain economic stability while fostering an environment conducive to innovation and competitiveness.