Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Criticisms of socialism wikipedia , lookup
Production for use wikipedia , lookup
Economics of fascism wikipedia , lookup
Economic democracy wikipedia , lookup
Participatory economics wikipedia , lookup
Business cycle wikipedia , lookup
Economic calculation problem wikipedia , lookup
Non-monetary economy wikipedia , lookup
Post–World War II economic expansion wikipedia , lookup
American Free Enterprise The Benefits of Free Enterprise A Tradition of Free Enterprise “ Land of opportunity” Equality of opportunity Keys to America’s economic success: Land, resources, human capital (immigrants) Free enterprise – social and political freedom to pursue economic self-interests Constitutional Protections The Bill of Rights Property rights 5th and 14th Amendments 5th - Due process clause Applies to actions of federal government 14th – Applied Due process clause to state governments. Constitutional Protections Taxation Article I – gives Congress power to levy taxes Sections 2 and 9 - must be apportioned according to population equally 16th Amendment (1913) – Congress given clear right to set taxes based upon income Section 10 (Article I) – Obligation of Contracts No laws can be passed changing the terms of someone’s business agreement Basic Principles Profit Motive – the force that encourages people and organizations to improve their material wellbeing Business make their own choices Forces management to exercise financial discipline Rewards innovation Basic Principles Open Opportunity – everyone can compete in the marketplace. Economic mobility – up or down Based on how well you do Basic Principles Economic Rights Legal equality Private property rights Free contract Voluntary exchange Competition Role of the Consumer Consumers are free to make their own economic choices Make their desires known through their purchases Can work with interest groups which seek to influence public officials to act or vote favorably to their group – taxation, land use, farmers, etc. Role of Government Protect rights spelled out in Constitution Protect us from problems that affect us all (pollution, unsafe foods, etc) Ensure that producers provide consumers with information – examples? Public disclosure laws Role of Government Protect health, safety, and well-being of citizens Restrictions / regulations -- Examples? Matters of public interest -- Examples? Consumer protection Role of Government Negative affects of Regulation Bigger government – increased government spending Costly for businesses to implement – cuts into profits Stifles competition resulting in higher prices American Free Enterprise Promoting Growth and Stability Tracking Business Cycles American Economy is 108 HUGE!!!!! million households 288 million people 137 million jobs Earning $8 trillion a year $28 billion saved in 71,000 banks 6.5 million homes / 17 million cars annually Tracking Business Cycles Looking at Macroeconomic trends. Macroeconomics – the study of the behavior and decision making of entire economies Microeconomics – the study of the economic behavior and decision making of small units such as individuals, families, and businesses Tracking Business Cycles Measuring economic well-being: Gross Domestic Product (GDP) – the total value of all final goods and services produced in an economy GDP is used to help predict business cycles Business Cycle – A period of macroeconomic expansion followed by a period of contraction or decline Tracking Business Cycles Free Enterprise systems are susceptible to cycles Economic decisions are made by individuals Businesses act in their own self-interests Government attempts to prevent wild swings Business cycles affect our lives Promoting Economic Strength Government seeks to keep economy stable through policies that promote High employment Steady growth Stable prices Technology and Productivity Maintaining our high standard of living Increase productivity – How? American work ethic – a commitment to the value of work and purposeful activity Improved technology – the process used to produce a good or service Inventions and patents American Free Enterprise Providing Public Goods Public Goods Public Goods: a shared good or service for which it would be inefficient or impractical: 1) to make consumers pay individually and 2) to exclude nonpayors A number of consumers can use them without reducing the benefits to any single consumer Costs and Benefits When a good or service is public: 1) the benefit to each individual is less than the cost that each would have to pay if it were provided privately, and 2) the total benefits to society are greater than the total cost Costs and Benefits Public goods are financed by the public sector The private sector has little incentive to produce public goods Free riders consume what they do not pay for Market Failures Market failures are situations in which the market, on its own, does not distribute resources efficiently Free riders are examples of market failure Externalities An externality is an economic side effect of a good or service that generates benefits or costs to someone other than the person deciding how much to produce or consume Positive externalities – beneficial side effects Negative externalities – unintended costs Government aims to encourage positive externalities and limit negative externalities American Free Enterprise Providing a Safety Net The Poverty Problem Free markets generate wealth but it’s spread unevenly through society Some live below the poverty threshold See Overhead The Welfare System Redistribution Programs Cash transfers – direct payments of money to poor, disabled, and retired TANF – Temporary Assistance for Needy Families Social Security Unemployment insurance Worker’s compensation Redistribution Programs In-kind benefits – food stamps, subsidized housing, legal aid Medical benefits – Medicare and Medicaid Education Faith-based initiatives – religious organizations compete for federal funds to deliver social services