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2.04 U.S. Economy Objective 2.04 Understand the United States economic system.

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Presentation on theme: "2.04 U.S. Economy Objective 2.04 Understand the United States economic system."— Presentation transcript:

1 2.04 U.S. Economy Objective 2.04 Understand the United States economic system.

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

3 United States Mixed Economy Free Enterprise/Market Economy

4 Market Economy Characteristics Private property ownership. Private property ownership. Freedom of enterprise and Choice Freedom of enterprise and Choice Motive of self- interest Motive of self- interest Competition System of markets and prices The market addresses consumer wants

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

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

7 United States Mixed Economy Command Economy

8 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)

9 The government provides some services to take care of peoples needs Highways--roads and other services Highways--roads and other transportation services transportation Schools and other public education services Schools and other public education serviceseducation Social Security Medicare Defense and public safety

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

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

12 United States Economy Summary Largest national economy in the world Largest national economy in the world economy A mixed economy A mixed economymixed economymixed economy Corporations and other private firms make the majority of microeconomic decisions. Corporations and other private firms make the majority of microeconomic decisions. Corporationsmicroeconomic Corporationsmicroeconomic 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.


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