Download Chapter 3: American System

Chapter 3: American System Name: ______________________________ Period: ________
Section 1: Benefits of Free Enterprise
Describe the tradition of free enterprise in the USA:
Describe how property rights and taxation protect free enterprise:
Define the following terms:
profit motive
open opportunity
legal equality
private property rights
free contract
voluntary exchanges
competition
interest group
Chapter 3: American System Name: ______________________________ Period: ________
List and give an explanation of the three principles of free enterprise:
1. _____________________________________________________________________________________
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2. _____________________________________________________________________________________
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3. _____________________________________________________________________________________
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Describe the role of the government in
the free enterprise system:
List at least three benefits of the free
enterprise system:
Section 2: Promoting Growth and Stability
Define the following terms:
macroeconomics
microeconomics
gross domestic product
business cycle
What does GDP tell us about business cycles: _____________________________________________
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Chapter 3: American System Name: ______________________________ Period: ________
Describe the three ways the government promotes economic strength:
1. employment:
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2. growth:
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3. stability:
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What is the effect of technology on productivity?
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How do patents and copy rights promote innovation?
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How does innovation help the economy?
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Section 3: Providing Public Goods
Define the following terms:
public good
public sector
private sector
free rider
market failures
externality
Chapter 3: American System Name: ______________________________ Period: ________
Give two examples of public goods:
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Why is a free rider a type of market failure?
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What is a positive externality?
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What is a negative externality?
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Critical Thinking: Is the criminal justice system (police and courts) a public good? Explain
your answer.
Section 4: Providing a Safety Net
Define the following terms:
poverty threshold
welfare
cash transfers
in-kind benefits
Chapter 3: American System Name: ______________________________ Period: ________
To which groups in society does the government provide a safety net?
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Describe each of the following cash transfers:
1. temporary assistance for needy families:
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2. social security:
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3. unemployment insurance:
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4. workers compensation:
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What is the difference between in-kind payments and cash transfers?