Final answer:
A government agency is typically established through an act passed by the U.S. Congress, and it operates largely on tax dollars instead of competing in the market like private companies. These agencies can range from regulatory bodies to government corporations designed to provide essential services.
Step-by-step explanation:
To establish a government agency, specific steps and requirements must be met, and these differ significantly from the workings of private businesses. Unlike a private company that sells products or services in a competitive market and generates revenue from those sales, a government agency is typically funded by tax dollars and does not face competition or the threat of bankruptcy in the same way. The creation of a government agency often entails an act passed by Congress, defining its scope, mission, and authority. These entities may carry out a broad range of functions, including regulatory oversight, government operations, and administration of certain services or initiatives deemed important for public welfare.
An example of a government agency that performs regulatory functions is the Securities and Exchange Commission (SEC). This agency, along with others like the Federal Communications Commission (FCC) and the Commodity Futures Trading Commission (CFTC), emerged to regulate aspects of economy and society with authority largely insulated from partisan politics.
Another type of government entity is a government corporation, which operates a quasi-business enterprise and may generate revenue that helps it be self-sustaining, although still primarily funded by tax dollars. These corporations are created to deliver services that are essential yet may be influenced by market forces, such as the United States Postal Service (USPS).
Therefore, the correct answer to the original question is that a business that is a government agency must be established by an act passed by the U.S. Congress to outline its creation and function.