Download American Free Enterprise Capitalism

American Free Enterprise
Capitalism
Chapter 3
Lesson 1
Characteristics of Free Enterprise Capitalism
•
Free enterprise economy
• Both capitalism and free markets
•
Characteristics of capitalistic free enterprise economy include
• Economic freedom
• Voluntary exchange
• Private property rights
• Profit motive
• Competition.
Characteristics of Free Enterprise Capitalism
•
Economic freedom
• Choose your occupation, employer, and job location
•
Voluntary exchange
• Between buyers and sellers.
•
Private property rights
• People own and control possessions
• Incentive to work, save, and invest.
•
Profit motive
• Responsible for growth of free enterprise system.
•
Competition
• Benefits both consumers and the economy.
Voluntary Exchange
Economic Freedom
Benefits of Free Enterprise Capitalism
•
Individual freedom = Economic freedom
• Vice versa
•
Market economies
• Produce huge variety of goods.
•
Market economies
• Adjust daily - ever-changing prices of goods and services
•
Intense competition
• Promotes economic progress
• Continuing supply of newer and better products.
•
When more & better products are produced - wealth is created
Disadvantages of Free Enterprise Capitalism
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Periods of uneven economic growth
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Gaps - between rich and poor citizens - increasing
•
Suppliers tend to combine to avoid competition - Monopoly
• Results in fewer participants on supply side of market.
•
Businesses (corporations) have most of the same rights as individuals
• Also have many responsibilities - result of government-imposed
regulations.