2.04 U.S. Economy

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2.04 U.S. Economy

• Objective 2.04 Understand the United States
  economic system.

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Mixed Economy

• A combination of a free enterprise (or market)
  and a command economy.
• Privately owned businesses and government both
  play important roles.

• The marketplace produces
• cars
• health care
• technology
• food (with some government regulations)
• The government provides
• defense
• education

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United States Mixed Economy

• Free Enterprise/Market Economy

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Market Economy Characteristics

• Private property ownership.
• Freedom of enterprise and Choice
• Motive of self-interest

• Competition
• System of markets and prices
• The market addresses consumer wants

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Market Economy

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

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Market economy

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

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United States Mixed Economy

• Command Economy

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Limited Government

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

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The government provides some services to take
care of peoples needs

• Highways--roads and other transportation services
  
• Schools and other public education services

• Social Security
• Medicare
• Defense and public safety

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Command Economy

• Advantages
• Consumers have some protection in the marketplace
• Essential services are provided for citizens

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Command Economy

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

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United States Economy Summary

• Government has a minimal role in the domestic
  economy.
• Business firms in the U.S. have much less
  regulation than those in many other nations.

• Largest national economy in the world
• A mixed economy
• Corporations and other private firms make the
  majority of microeconomic decisions.