Unit 1: Lecture 3
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Transcript of Unit 1: Lecture 3
Unit 1: Lecture 3
American Free Enterprise System
What economic traditions do we have in the USA?
Land of Opportunity Open Land Natural Resources Steady flow of Immigration
Constitution Protections for the American Dream Property Rights under the 5th Amendment
DUE PROCESS Taxation
BASED ON INCOMEOBLIGATION OF CONTRACTS
1. Profit Motive
2. Open opportunity
3. Economic Rights
What are the Basic Principles of the Free Enterprise System?
What role does the consumer play in the system of free enterprise?
Consumers Dictate the Market
Interest Groups
Does the government have any control over goods and services in a free enterprise system?
Public Disclosure Laws Public Interest
How does the government track and seek to influence business cycles?
Macroeconomics Gross Domestic
Product Microeconomics
Business Cycle
How does the government try to promote economic
strength? Employment Growth Stability Economic Citizenship
Why and how does the
government encourage
innovation?
TECHNO
LOG
Y
What are public goods?
A public good is a shared good or service for which it would be impractical to make consumers pay individually and to exclude non-payers.
Public Sector Free Rider
Market Failure
How does government manage 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.
What role does the government play in fighting poverty?
Poverty Threshold
How is it calculated?
Welfare
What government programs attempt to aid those facing poverty?
Redistribution Programs
• Cash transfers Temporary Assistance for Needy Families (TANF) Social Security Workers’ Compensation
Other Types of Redistribution Programs In-Kind benefits Medical Benefits Education Benefits
Unit 1: Lecture 3 (Chapter 3 L.R.Q.s)
1) How does the constitution promote free enterprise?
2) What are the 3 basic principles of the Free Enterprise system?
3) How could the consumer both negatively and positively effect the free enterprise system?
4) What is the role of the government in the free enterprise system?
5) What happened to the public good when Market failure occurs?
6) How do externalities effect the economy?
7) What stereotypes arise in a free enterprise system about poverty?
8) How does the United States government use our economy to balance the level of poverty in the USA?