Download 3.2 Regulating the Private Sector

3.2 Regulating the Private Sector
Objectives
 Explain how government can improve operation
of the private sector.
 Distinguish between regulations that promote
competition and those that control natural
monopolies.
 Describe how fiscal policy and monetary policy
try to control the business cycle.
CONTEMPORARY ECONOMICS
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3.2 Regulating the Private Sector
Key Terms
 private property rights
 antitrust laws
 natural monopoly
 fiscal policy
 monetary policy
CONTEMPORARY ECONOMICS
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3.2 Regulating the Private Sector
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Rules for a Market Economy
The effects of government regulation are
all around you.
Examples
Clothing labels
Speed limits
CONTEMPORARY ECONOMICS
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3.2 Regulating the Private Sector
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Establishing Private
Property Rights
Private property rights guarantee
individuals the right to use their resources
as they choose or to charge others for the
use.
CONTEMPORARY ECONOMICS
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3.2 Regulating the Private Sector
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Intellectual Property Rights
Patent
Copyright
Trademark
CONTEMPORARY ECONOMICS
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3.2 Regulating the Private Sector
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Measurement and Safety
U.S. Bureau of Weights and Measures
The U.S. Food and Drug Administration
(FDA)
The U.S. Department of Agriculture
The Consumer Product Safety
Commission
CONTEMPORARY ECONOMICS
© Thomson South-Western
3.2 Regulating the Private Sector
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Market Competition
and Natural Monopolies
Promoting market competition
Antitrust laws attempt to promote
competition and reduce anticompetitive
behavior.
Regulating natural monopolies
When it is cheaper for one firm to serve the
market than for two or more firms to do so,
that firm is called a natural monopoly.
CONTEMPORARY ECONOMICS
© Thomson South-Western
3.2 Regulating the Private Sector
SLIDE
8
Growth and Stability
of the U.S. Economy
Fiscal policy uses taxing and public
spending to influence national economic
variables.
Monetary policy tries to supply the
appropriate amount of money to help
stabilize the business cycle and promote
healthy economic growth.
CONTEMPORARY ECONOMICS
© Thomson South-Western