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Civics & Economics Review
1.01 : How did geographic diversity influence the economic,
social, and political life of colonial North America ?
Key Colonies
Virginia
Maryland
Proprietor : Given charter by king or queen for a grant of land
Joint-Stock Company : Investor owned. Sought a profit
Indentured Servants : Worked 4-7 years to pay off passage to New World
Proprietor /
Founder
VA. Co. of London
Purpose
Sought gold then
grew tobacco
Georgia
Cecil Calvert
( Lord Baltimore )
James Oglethorpe
Massachusetts
Puritans
Religious freedom
for Catholics
New start for
debtors
Religious freedom
Rhode Island
Roger Williams
Religious freedom
Pennsylvania
William Penn
Religious freedom
Special
House of
Burgesses – 1st
legislature
MD. Religious
Toleration Act
No slavery at
first
Mayflower
Compact –
agree to selfrule
Est. separation
of Church &
state /
Universal male
suffrage
Quakers
1.02 : How did ideas about self-government develop in
British North America ?
Roots of Representative Government ;
England :
Magna Charta – Limited king’s power
English Bill of Rights – Extended rights to the People
Common Law – Based on precedent ( past decisions )
applied fairly
Colonies :
VA. House of Burgesses – 1st colonial legislature
Mayflower Compact – Pilgrims agreed to govern themselves
1.03 : What were the causes of the American Revolution ?
1.04 : How did a unique American identity emerge ?
Colonial Rebellion & Independence :
Mercantilism – Britain controlled trade of the colonies
Salutary Neglect – Colonies had large degree of self-government due to distance. Ended with
cost of French & Indian War and new taxation
“No taxation without representation” – Colonists felt their rights were violated by Britain
Event
Proclamation of 1763
Sugar Act
Stamp Act
Effect
Prohibited settlement west
of Appalachian Mts.
1st considered to be revenue
tax by colonists
1st direct tax
Declaration of Independence :
Principles – John Locke
Natural Rights – Life, liberty, property
Social Contract – Ruler derives power from the
people. They may overthrow
unjust government
Author : Thomas Jefferson
Preamble : Introduction
List of Grievances : Complaints against King George III.
Longest section
Thomas Paine : Common Sense – Argued for
independence
Coercive Acts /
“Intolerable” Acts
Battles of Lexington &
Concord
Punished colonists for
Boston Tea Party
First armed conflict
Colonial Reaction
Ignored law
Boycott (non-importation )
of British goods led to
repeal of tax
Boycott led to repeal.
Colonist met at Stamp Act
Congress
Colonists met at First
Continental Congress
Second Continental
Congress and “Olive
Branch” Petition
1.05 : What major domestic problems did the nation face under the Articles of
Confederation and to what extent were they resolved by the Constitution ?
1.06 : How did the Federalist and Anti-Federalist Papers
view the role and power of government differently ?
Federalist Papers
Articles of
Confederation
States
All 13
Unicameral legislature
only
Power given to :
States to ratify :
Branches of
government
Power to enforce
taxes?
Power to regulate
interstate commerce?
Dealt effectively with
rebellion?
Constitution
No
National Government
9 of 13
Bicameral Legislature
Executive
Judicial
Yes
No
Yes
No – Shays’ Rebellion
Yes – Whiskey
Rebellion
Power for
For Constitution ?
Supporters
Loose Constructionist View
Strict Constructionist View
Strong national government
Federalist Party
Implied Powers
Necessary & Proper Clause or
“Elastic Clause”
Strong State powers
Democratic-Republican Party
Supported by 10th Amendment
1.07 To what extent does the Bill of Rights extend the Constitution ?
Amendment
st
1
2nd
3rd
4th
5th
6th
7th
8th
9th
10th
National government
Yes
Hamilton, Jay,
Madison
Anti-Federalist
Papers
States
No
Patrick Henry,
George Mason
Rights
Freedoms of religion, speech, press; right to assemble and petition government
Right to bear arms
No quartering of soldiers in homes during peacetime
No unreasonable searches or seizures; “right to privacy”
No double jeopardy / right to not testify against oneself
Right to fair & speedy trial / right to counsel ( lawyer )
Right to jury trial in civil cases involving $20 or more
No “cruel and unusual” punishment
People not limited to rights stated in the Bill of Rights
Powers not given to national government are reserved to the States and People
1.08 How is the American system of government similar to and different from other forms of government ?
Term
Democracy
Meaning
U.S. ? ( Y / N )
Y
Rule by the People
Direct Democracy
Republic
Authoritarian
Every citizens votes on all issues
N
Voters elect officials to govern for them
Y
Power is in the hands of a dictator or group of people
N
2.01 What principles are embodied in the United States Constitution ?
Term
Popular Sovereignty
Federalism
Separation of Powers
Checks & Balances
Definition
Authority for the government comes from the People
Power is divided between states & national government
Powers of national government are divided among branches of
government
Each branch of government can restrain the other branches
Powers
Expressed
Given to
National Government only
Examples
Declare war, make treaties
Concurrent
Both
Tax, make & enforce laws
Reserved
States only
Establish and regulate public schools
2.02 How does the Constitution organize the three branches of government at the national level in terms of structure and powers ?
Legislative Branch – Congress ;
“Makes the laws”
Members
Representation Based On
Requirements
Term
Leader
Specific Functions
Legislative Terms
Filibuster
Cloture
Whips
Standing Committees
Conference Committees
Select Committees
Joint Committee
Franking privilege
Casework
Gerrymander
Bicameral = 2 Houses ( result of Great Compromise )
House of Representatives
435
Population – per Census
25 yrs. Old / 7 yr. U.S. resident / citizen
2 yrs.
Speaker of the House
Originate “money bills”
Impeach officials / judges
Senate
100
2 per state
30 yrs. Old / 9 yrs. U.S. resident / citizen
6 yrs.
President Pro Tempore when the Vice-President
is not in attendance. V.P. may break tie votes.
Approve treaties
Approve presidential appointments
Trial of impeached officials / judges
Significance
Senators may speak as long as they want to delay legislation
3/5 vote of Senate to end a filibuster
Keep track of votes and encourage party members to vote a certain way
Permanent committees like Ways & Means committee
Work out differences in bills to be passed by House and Senate
Temporary committees to investigate an issue
Committee with members of both House and Senate
Free postage to send mail to constituents ( people they represent )
Help a legislator gives to constituents in dealing with government agencies
When congressional districts are drawn up to favor one party over the other ( illegal )
Limits to Congressional Power – Congress may not
Suspend habeus corpus in peacetime
Pass ex-post facto laws
Pass bills of attainder
Right to be presented before a judge and evidence shown to hold in jail
Holding someone responsible for a crime before it was made illegal
Suspending a person’s right to a jury trial
Executive Branch ; “Enforces the law”
Must be 35 yrs. old /
native born citizen /
resident of U.S. for 14
yrs.
Commander-in-Chief
Chief Diplomat
Head of State
Legislative Leader
Power to veto bills
passed by Congress
Economic Leader
Chief Executive
Party Leader
15 Departments
Dept. of Homeland Security
President
Executive Departments
Cabinet = Heads of
the executive Depts...
Advise the president
Independent Agencies
Judicial Branch – “Interpret the law”
Supreme Court
Appellate Courts
District Courts
Presidential Roles
Head of military
Directs foreign policy
Represents U.S. to other leaders
Proposes laws for Congress to
consider
Propose budget, etc.
Head of executive Depts./ agencies
Leader of his political party
Executive Agencies
Government
Corporations
Regulatory Boards &
Commissions
Coordinate defense against terrorist
acts
Manages public lands and resources
Dept. of Interior
Carries out foreign policy
Dept. of State
Law enforcement
Dept. of Justice
Deal with specialized areas of government - ex. N.A.S.A.
Provide services but at no profit – ex. U.S. Postal Service
Make and enforce rules for industries and groups – ex. Federal
Communications Commission ( F.C.C.)
Appointed by Pres. and
approved by Senate
Life
Term
Highest Court – original jurisdiction for disputes
between states and trial of foreign officials only
Requirement
Hears appeals / reviews cases from lower courts.
No original jurisdiction
Has original jurisdiction for most cases
1 court with nine justices. Have power of
judicial review – may determine
constitutionality of laws. Result of
Marbury v. Madison case
12 geographic circuit courts and 1 federal
circuit court for special cases
94 district courts
2.04 What are the procedures for changing the Constitution ?
2/3 vote of Congress or state conventions then 3/4 of states must ratify
What have been the effects of past changes to the Constitution ? ( beyond the Bill of Rights )
Amendment
11
12
13
14
15
16 ( I )
17 ( S )
18 ( A )
19 ( W )
20
21
22
25
26
27
Effect
Can’t use federal courts to sue a citizen of another state
Fixed problems in electing the president
Abolished slavery
Equal rights to all citizens ( anyone born or naturalized in U.S.)
Suffrage ( vote ) not restricted by race, Extended to African-American males
Income tax allowed
Senators directly elected by the people
Alcohol prohibited ( Prohibition began )
Suffrage given to women
Moved inauguration of president up to Jan 20th
Ended Prohibition
2 term limit for presidents
Vice president succeeds the president upon death or removal from office
18 year olds may vote
Salary increases for members of Congress can not go into effect until the following House election
2.05 What court cases have demonstrated that the U.S. Constitution is the supreme law of the land and how have they done so ?
Case
Marbury v. Madison
McCulloch v. Maryland
Gibbons v. Ogden
Plessy v. Ferguson
Brown v. Board of Education
Korematsu v. U.S.
Heart of Atlanta Motel v. U.S.
Swann v. Charlotte-Mecklenburg
Decision
Established judicial review for the Supreme Court
Ruled that the states could not tax an agency ( National Bank ) of the national government. Upheld
supremacy of the national government over the states
Affirmed that only the national government could regulate interstate commerce
Allowed segregation of the races. “Separate but equal”
Stated segregation no longer allowed. “Segregation is inherently unequal”
Allowed the internment of Japanese-Americans during WWII for purposes of national security
Upheld federal civil rights legislation banning racial discrimination
Allowed busing to enforce federal court orders to integrate schools
2.06 What court cases have demonstrated that the Constitution & Bill of Rights protect the rights of individuals and how ?
First Amendment Rights
Engle v. Vitale
Tinker v. Des Moines
Hazelwood v. Kuhlmeier
Texas v. Johnson
Prayer in school violates the establishment clause against an official religion
Upheld right of students to wear black armbands in protest of the Vietnam War as freedom of speech
Allowed school administration to censor content of student newspaper
Allowed flag burning as a form of free speech for political protest
Rights of the Accused :
Gideon v. Wainwright
Miranda v. Arizona
Mapp v. Ohio
Furman v. Georgia
Right to legal counsel even if cannot afford one
Suspects must be informed of their rights at time of arrest
Evidence gained in violation of the 4th amendment may not be used ( exclusionary rule )
Death penalty must be applied fairly ( not discriminate by race )
2.07 In what ways are modern controversies over powers of the federal government similar to the Federalists- Anti-Federalists debate?
Loose Constructionist view : allows expansion of national power ( Federalists )
Support for social welfare programs supported by increased taxes
Growth of “big government” / added executive departments
Strict constructionist view : limits national power ( Antifederalists )
Opposed to “big government” and taxation
Support for term limits for government officials
2.08 How does the national government raise revenue from taxation and other sources ?
Income tax
Excise tax
Tariffs / duties
Estate tax
Corporate taxes
Progressive taxation
Regressive taxation
Bonds
Taxes paid on earnings
Tax on certain goods produced within the nation
Tax on imports
Tax on wealth passed onto heirs
Taxes paid by businesses
U.S. graduated income tax is an example. Higher incomes pay a greater percentage of income
Excise taxes are an example. Has greater impact on lower incomes
Certificates that promise repayment with interest
2.09 What services do government agencies provide citizens and how are they funded ?
Agency
Federal Bureau of Investigation ( F.B.I.)
Central Intelligence Agency ( C.I.A.)
Federal Emergency Management Agency
Internal Revenue Service ( I.R.S. )
Center for Disease Control ( C.D.C. )
Citizenship and Immigration Service ( C.I.S. ) formerly called the
Immigration and Naturalization Service ( I.N.S.)
Function
Investigates federal crimes
U.S. spy agency
Responds to natural disasters
Collects taxes
Addresses the threat of diseases to the nation
Oversees admission of people to the U.S. and the application process for
citizenship
3.02 How do the North Carolina Constitution and local charters define the framework, organization, and structure of government at the
state and local levels ?
N.C. Legislative Branch
N.C. Executive Branch
N.C. General Assembly - Bicameral
Special Powers
Governor
commute
reduce a criminal sentence
( ex. death to life in prison )
Head of Executive
parole
Grant early release from prison
Branch
Lt. Governor
Cabinet
Council of State
N.C. Judicial Branch
Supreme Court
Court of Appeals
Superior Court
District Court
2nd to governor
10 heads of executive depts. Report
to the governor
8 heads of depts.. Report to the NC.
legislature
7 justices. Court of last appeal
Reviews lower court decisions
Handles felonies and large civil
cases
Handles misdemeanors, small civil
cases, and other types of law
( family/divorce/ traffic )
2 yr. terms
4 yr. term
Elected for 8 yrs.
8 yr. terms
8 yr. terms
Elected for 4 yr. terms
Local
Government
Municipal government
Serves
Managed by
Cities, towns, villages
Mayor – executive
Mayor – Council Form
Council – Manager Form
Commission Form
County Government
Strong
Has veto
power.
Appoints
many
officials
Weak
Council
has most
powers
Council - legislative Passes ordinances – city
laws
Council appoints a professional to manage city
departments. Began as reform of corrupt and
inefficient government
Elected as heads of city departments. They
choose one of their members to be mayor
Large subdivision of a state ( 100 in N.C. )
An elected Board of Commissioners governs
most counties. Many appoint a professional
county manager to run day to day operations.
Some county offices are run by elected
officials like sheriff and district attorney
3.04 How may the state constitution and local charters be changed ?
2 Step Process : 1. Proposed and passed by the legislature
2. ratified by the voters
3.05 What court cases have demonstrated that the North Carolina Constitution is the supreme law of the state?
Leandro v. North Carolina ( 1997 ) : The North Carolina Constitution guarantees the right to an education. In 1994, parents from 5 low wealth
counties sued the state for assistance because they felt their counties did not provide an adequate education.
The NC. State Supreme Court ruled against equity ( equal spending ) among school districts but upheld adequacy ( must achieve level III on
EOCs ) to guide spending.
3.08 How does the state raise revenue from taxation and other sources ?
Sources of State Revenue
Intergovernmental revenue
Sales tax
State employee retirement taxes
Income tax
From the federal government.
Tax on goods & services
Used to fund pensions for state employees
Tax on wages, salary, etc.
# 1 source
# 2 source but #1 tax source
# 3 source
# 4 source
From the state
Tax on assessed value of home, car, etc.
# 1 source
#2 source but #1 tax source
Sources of County Revenue
Intergovernmental revenue
Property tax
4.01 How are political parties organized ?
Types of Political Parties
Major
One of the two dominant parties throughout
U.S. history
Third
Address issues not dealt with by the major
parties
Develop around a specific issue
Single Issue
Party Systems
One Party
Two Party
Multi-Party
Authoritarian governments like communist China
Two dominant parties though others are allowed. Ex. : United
States ( Democrats & Republicans )
Multiple parties as in most parliamentary systems. Usually
multiple parties must form a coalition to have a majority to
govern
1st Two : Federalists & Democratic-Republicans
( Hamilton & Jefferson )
Currently : Democrats & Republicans
Ex: Populist and Progressive Parties
Ex: Prohibition Party and Right to Life Party
Term
Definition
Political party’s statement of beliefs
Each statement in a platform
Election to determine a party’s candidate for the general election
Platform
Plank
Primary
Caucus
General election
Political Machine
Used by some states as an alternative to a primary
Election between different parties for elected office
When one party had control of a local government Ex. : Tammany Hall in N.Y.
city in the late 1800s controlled by the Democrats and “Boss Tweed”
6.01 : Trace the development of law in American society
Landmark Historical Documents
Code of Hammurabi
Twelve Tables
Code of Justinian
Common Law
First known set of laws ( Ancient Babylon )
Laws of the Roman Empire
Laws of the Byzantine Empire
British tradition of law based on precedent, past example
6.02 : Cite examples of types of law
Statutory
Administrative
Punishes unacceptable behavior
Adversarial system
Concerns disputes between individuals
Tort
Suits-in-equity
Divorce, family law
Regulates our behaviors
Sets rules for government agencies to follow
Constitutional
International
Determines rights under the Constitution
Treaties and other agreements with other nations
Criminal
Civil
Illegal to steal, etc.
Prosecution vs. Defense
Lawsuits for monetary damage usually
Cases involving damage from negligence
Seek fair treatment in cases not covered by the law
Local ordinance against smoking in public places
Congress made it illegal for the C.I.A. to assassinate
foreign leaders
Supreme Court cases
N.A.F.T.A. trade agreement
6.03 : What are the various procedures in the enactment, implementation, and enforcement of law ?
How A Bill Becomes A
Law
Bill Proposed
Only Senators or
Representatives may
propose a law
Bill assigned a number
Sent to committee
Committee Action
Assigned to appropriate
standing committee
Floor Action
House and Senate debate
the bill
Committee may recommend
passage or kill the bill
(ignoring it is called a
pigeonhole)
If passes as is by both then
goes to the president
If changed by either then
goes to conference
committee
Conference Action
Members from both Senate
and House work out a
compromise bill
Compromise bill sent back
for vote
If passed then goes to
president
Passage
President may sign bill
into law or veto bill
If president does nothing,
it passes after 10 days
normally
If 10 days left in
Congressional session,
president may do nothing
and it is automatically
vetoed ( pocket veto )
Procedure In A
Criminal Case
Arrest
Suspect taken into
custody by police
Preliminary Hearing
Indictment
Suspect appears before Grand jury (or judge)
judge and bail is set
hears evidence and
decides whether or not
to send suspect to trial
Arraignment
Suspect brought
before a judge and
makes a plea of guilty
or not guilty
Trial
Prosecution and
Defense argue their
cases to a jury
Prosecution may offer
defendant a plea
bargain – lesser crime
if plead guilty and
avoid trial
Defendant may
decline a jury and
have a bench trial
with judge only
Verdict
Acquittal – found not
guilty
or
Guilty – sentenced by
judge
If a hung jury results
then prosecution may
retry the case or
request a plea
bargain
6.08 : What methods are used by society to address criminal and anti-social behaviors ?
Incarceration. Remove felon from society
Early release from prison. Must meet with parole officer for monitoring
Meet with probation officer and keep terms of agreement to avoid prison
Short but intense military-like imprisonment meant to rehabilitate
Person is confined to their home
Person must do specified volunteer work
Person must pay damages for their crime
Prison
Parole
Probation
Boot Camp
House Arrest
Community Service
Restitution / Reparations
Mandatory sentencing
Judge is required by law to give certain minimum punishments. Response to problem of recidivism ( repeat
offenders )
Juvenile Court
Purpose is rehabilitation, not just punishment
Economics : Study of how we make decisions in a world with limited resources ( scarcity )
Thus, we make :
And have :
trade offs - alternative if you do one thing rather than another ( watch tv rather than study )
opportunity costs - cost of the next best use of your time or money when you do or buy another thing
( do poorly on test the next day )
Necessary for survival
Things we would like to have
Needs
Wants
Goods
Services
Fixed
Variable
Products
Work performed for someone else
Stays the same
May change over time
“Additional / extra”
Marginal
Fixed Costs : rent / mortgage for a building, loan payment
Variable Costs : natural resources, wages
food, shelter, clothing
luxury items, car, cable tv, etc.
shoes, stereo, shovel, television
cable tv, car wash, healthcare
Revenue
Costs
Money brought in / sales
Money it takes to make a good or service
What you get from something ( + or - )
Benefit
Marginal Cost = Cost of producing one additional unit of a good
Supply & Demand
Draw Supply & Demand Curves to figure out the laws
Supply curve goes up ( left to right )
Demand curve goes down
Price on left and Quantity on bottom
Just read the curve to figure out the law
Law of Supply :
As price goes up, supply goes up and vice versa
Law of Demand :
As price goes up, demand goes down and vice versa
Where supply and demand are equal, you have the equilibrium price
Surplus & Shortage :
Look at equidistant points on supply and demand curves
Compare the supply quantity vs, demand quantity
Surplus = higher supply than demand
Shortage = higher demand than supply
If It Makes Prices Consumer Demand Goes
Go Up
Demand Curve
Consumer Changes that Contribute
Down
Moves to left
Go Down
Up
Moves to right
If It Makes Prices
Supply Offered Goes
Supply Curve
Changes that Contribute
Go Up
Up
Moves to right
Go Down
Down
Moves to left
Cost of resources increase / workers are less productive /
higher taxes / more government regulations
Cost of resources decrease / workers are more productive
/ lower taxes / less regulations / business receives subsidy
Demand for a Good or Service
Demand Is
Changes when price changes
Elastic
Does not change much when price changes
Inelastic
# consumers increase / consumer income increases /
expectation of product shortage / product popular
# consumers decrease / consumer income decreases
Substitute Goods
Complementary
goods
Competing products that can be used in
place of each other
Products used together
Factors of Production
=
Entrepreneur
Capital
Natural Resources
Labor
butter and margarine, Coke and Pepsi
computers and software
Demand moves in opposite
directions
Demand moves in same production
Things needed to produce goods and services
Individuals who start new businesses and innovations
Tools, machinery, buildings, money used to make products
Things in nature used in production of goods
Physical and mental efforts of people
Types of Businesses
( Sole ) Proprietorship
Partnership
Corporation
Franchise
Cooperative
Single owner. Owner is liable ( responsible ) for business’ debts, negligence, etc.
Two or more owners. Also have liability
Owned by shareholders ( own stock ). They ex. Microsoft Corp.
have limited liability ( may lose on
investment but not responsible for company
negligence, etc. )
Share of profit paid out to shareholders
Dividend
Profit from selling a stock for a gain
Capital Gains
Sells name and products for use by others ( ex. McDonald’s )
Type of non-profit business that benefits its members ( ex. credit union )
Measuring the Economy
Gross National Product ( G.N.P. ) / Gross Domestic Product ( G.D.P. )
Unemployment Rate
Consumer Price Index ( C.P.I. )
inflation
deflation
Sum of all goods and services produced in a given year
% of workers that can not find a job
Tracks costs of goods over time ( inflation )
Rise in cost of goods over time
Decrease in cost of goods over time
The Business Cycle
Recession
Economy begins to decline
( contraction )
Depression
Lowest point in the business cycle
Recovery
Real G.D.P. begins to go back up.
The economy is expanding
Prosperity
High point in the business cycle
G.D.P. decreasing,
unemployment
increasing
G.D.P. at lowest,
unemployment at
highest
G.D.P. increasing,
unemployment
decreasing
G.D.P. at highest,
unemployment at
lowest
International Trade
Exports
Imports
Tariff / Duty
Quotas
Comparative advantage
Free Trade Agreements
North American Free Trade Agreement ( N.A.F.T.A.)
European Union ( E.U. )
Union Type
Craft / Trade
Industrial
Goods sold to other countries
Goods bought from other nations
Tax on imports. To raise revenue or protect American manufacturers
Limits on number of goods than may be imported
Ability of one country to produce goods at a lower cost than another ( due
to better technology or cheaper labor )
Agreement to lower tariffs and other trade barriers
U.S., Mexico and Canada
Trade agreement among 15 European nations
Organizes
Skilled workers only ( electricians, etc. )
All workers in an industry
Examples
American Federation of Labor ( A.F.L. )
Congress of Industrial Organizations ( C.I.O. )
United Auto Workers ( U.A.W. )
Unions Support
Employers Support
Collective Bargaining
Closed Shop
Strike
Union bargains on behalf of members
with employer
Employer must hire only union workers
Workers refuse to go to work
Right to Work Laws
Open Shop
Lockout
Prevents unions from making workers
join
Employer does not allow workers to
work
Negotiations
A third party helps two individuals or groups to compromise
A third party hears both sides then makes the decision
Mediation
Arbitration
Money, Banking, and the Government
Currency
Commercial Banks
Savings & Loans
Credit Unions
Federal Deposit Insurance Corporation ( F.D.I.C. )
Federal Reserve Bank
Certificate of Deposit ( C.D. )
Includes both paper money and coins. Produced by the Treasury Dept.
Offer full services to individuals and businesses
Traditionally offer services to individuals
Only available to members of the sponsoring group. Operate as not-forprofit banks.
Insures individual accounts in case of bank failure. Resulted from
banking crisis of the Great Depression
The central bank of the U.S. It was founded in 1913. It sets the discount
interest rate ( rate banks may borrow from it ) and affects the rates
banks charge consumers. Will lower rates to stimulate borrowing and the
economy
Pays a fixed rate of interest for a set period of time
Stages of Economic Development
Agricultural Economy
Manufacturing Economy
Service Economy
Farming primarily.
Industry more than farming
Services more than industry
Traditional societies with less developed
technology
U.S. currently
Comparing Economic
Systems
Type of Economy
Who owns the factors of
production?
Who decides what, how, and for
whom to produce goods?
Market Economy
Private Citizens
Businesses
Command Economy
Government
Government
Mixed Economy
Private Citizens
Private Citizens – but
government sets regulations
Miscellaneous
No pure market economies in the
world
Former U.S.S.R., Cuba, North
Korea
( communist nations )
United States and most nations
Role of Government Terms
Laissez-faire
Monopoly
Trust
Antitrust laws
Merger
Regulatory
Supporters believe government should not interfere with the economy. Against government regulations
Supported by Adam Smith in his book Wealth of Nations
When a business dominates its industry
Business combination formed to establish a monopoly ( Ex. Standard Oil Co. )
Passed to prevent monopolies ( Ex. Sherman Antitrust act ) Broke up standard Oil and AT& T
When two companies join together. Must have approval of the government and not unfairly lower
competition
Role of government to set rules for Securities & Exchange
Oversees the stock markets
and monitor the activities of
Commission ( S.E.C. )
business to ensure fair competition Federal Trade Commission
Prosecutes illegal business
and to protect the consumer
activity
( F.T.C.)
Oversees radio and television
Federal Communications
industries
Commission ( F.C.C.)
Oversees safety of the food
Food & Drug Administration
supply and health claims
( F.D.C. )