U S Economy Objective Understand the United States

U. S. Economy Objective: Understand the United States’ economic system.

Mixed Economy n n A combination of a free enterprise (or market) and a command economy. Privately owned businesses and government both play important roles. n n The marketplace produces: n cars n health care n technology n food (with some government regulations) The government provides: n defense n education

United States’ Mixed Economy Free Enterprise/Market Economy

Market Economy Characteristics Private property ownership. n Freedom of enterprise and Choice n Motive of selfinterest n Competition n System of markets and prices n The market addresses consumer wants

Market Economy Advantages Individuals can own businesses and resources n Individuals can buy and sell goods and services n Competition in the market leads to greater choices n Consumers play a great role in the economy n

Market economy Disadvantage n The critical role of the consumer in the market can create a tremendous divide between the poor and the wealthy

United States’ Mixed Economy Command Economy

Limited Government n The government helps protect people by being a body that monitors public safety through regulatory agencies such as: n Food & Drug Administration (FDA) n Occupational Safety and Health Administration (OSHA)

The government provides some services to take care of people’s needs Highways--roads and other transportation services n Schools and other public education services n Social Security n Medicare n Defense and public safety n

Command Economy n Advantages n Consumers have some protection in the marketplace n Essential services are provided for citizens

Command Economy n Disadvantages n Citizens have to pay taxes so the government can provide services n Some think there is too much government control in the marketplace

United States’ Economy Summary Largest national economy in the world n A mixed economy n Corporations and other private firms make the majority of microeconomic decisions. n Government has a minimal role in the domestic economy. n Business firms in the U. S. have much less regulation than those in many other nations. n