Presentation on theme: "Chapter 16: Government’s Role in Our Economy"— Presentation transcript:
1Chapter 16: Government’s Role in Our Economy Section 1: Government Intervention in the Economy
2Why couldn’t it do anything else at first? The U.S. Government can…Coin moneyCollect taxesBorrow moneyMake a postal serviceBuild roadsRegulate commerceWhy couldn’t it do anything else at first?haga dineroreúna impuestospida dinero prestadohaga un servicio postalconstruya los caminosregule comercio
3What are the “ground rules” for a market economy? ¿Qué es las reglas para una economía de mercado?
4The government may only make laws that… ….protect private property against theft.….set up corporations.Government plays a SMALL role!!!…proteja la propiedad privada contra robo. …haga corporaciones
5What were the six needs for reform? ¿Qué fue las seis necesidades para la reforma?
61. Businesses have sometimes earned profits unfairly (high prices or false advertising) 1. Los negocios han ganado a veces ganancias injustamente (los precios altos o publicidad falsa)
72. Working conditions have sometimes been unsafe and inhumane. 2. Las condiciones de trabajo han sido a veces peligrosas e inhumanas.
93. Unsafe products have harmed consumers. 3. Los productos peligrosos han dañado a consumidores.
10“Upton Sinclair's The Jungle is a vivid portrait of life and death in a turn-of-the-century American meat-packing factory. A grim indictment that led to government regulations of the food industry, The Jungle is Sinclair's extraordinary contribution to literature and social reform.”
114. Not all Americans have had economic security (no sick days) 4. No todos norteamericanos han tenido la seguridad económica (no días enfermos)
125. The economy has been unstable. 5. La economía ha sido inestable.
236. Governments make tax rules and collect special taxes.
24What are the downfalls to government intervention in the economy? Read page 434What are the downfalls to government intervention in the economy?
25Negatives of Government Intervention Limits individual economic freedoms.Too many taxes.Pushes toward command economy.
26Assessment 1: Classify each example with its appropriate “Need for Reform.” Ryan is laid off of work and cannot find another job.Charlie suffers an accident at work and hurts his back. He cannot work for at least 3 months.Melissa notices that the paper factory she works at is dumping chemical waste in to a nearby lake.The Easy Bake Oven was recalled due to a burning malfunction.Fictional Corporation was lying about the value of its stocks.In 2008 the economy suffered a slowdown, and the housing market showed significant decline.
27Assessment 2: Classify each example with its appropriate “Method Government Use.” The government gives money to farmers who are suffering from a drought.Financial Corporation is investigated and brought to court by the attorney general.The Consumer Product Safety Commission (CPSC) recalls the Easy Bake Oven.The government fines and regularly inspects the paper factory that Melissa works at.The Federal Reserve System has attempted to change the health of the economy after 2008.Charlie receives disability and worker’s compensation for three months. Also, Ryan collects unemployment.
2816-2: Government Efforts to Solve Economic Problems Monopoly – a single business with total control of an industry and the prices set.Example: Andrew Carnegie had monopoly power over the steel industry.Trust – a group of several companies that benefit from the high prices they agree to charge.Carnegie J.P. MorganSTEEL RR
33Solution to Unfair Business Practices People demanded reasonable prices and the chance for small businesses to compete in any market.Sherman Anti-Trust Act (1890)Outlawed agreements among companies that limit competitionClayton Anti-Trust Act (1914)Outlaws many of the practices used by monopolies and Trusts1938 – no false advertising
34Legal MonopoliesThe government controls some businesses that offer necessities and public utilities.Phone serviceElectricityWaterRates are set by law.
35Protecting Workers and Consumers Safe Working ConditionsSafe ProductsOccupational Safety and Health Administration (OSHA) (1917)Sets and enforces health and safety standards at work.Fair Labor Standard Act (1935)Triangle Shirtwaist FireSegment 1Segment 2Segment 3Food and Drug Administration (FDA) (1927)Foods, cosmetics, and drugs are safe and labeled correctlyNew drugs are testedConsumer Product Safety Commission (CPSC) (1972)Safety rules for toys, tools, clothes, appliancesRecalls unsafe products
36Extra Credit Writing Activity The CPSC publishes a list of products that have been recalled because of safety issues. Go to the recalls page on the CPSC Web site for this year. Find three items related to your favorite recreational activity. Write a paragraph for each item explaining the hazard and suggest a remedy to make those products safe. Include an introduction and conclusion about the CPSC.
37Providing Economic Security Great Depression (1929)Factories and banks closed12 million people unemployed in 3 yearsThe New Deal (1933)Franklin D. RooseveltCreated jobsSocial Security Act (1935)Income from retirement, injury, death, or unemploymentPublic AssistanceFood stamps, welfareCreated increased government control in the economy
38Assessment 3:Write a persuasive paragraph for or against government intervention in the economy by writing a paragraph with:a main idea.three supporting details.
39Maintain Economic Stability Business CycleSeries of ups and downsUps = growthIncreased production and jobsDowns = recessionDecreased production and jobsGovernment tries to “flatten out” the ups and downs
41Maintaining Economic Stability Monetary PolicyFiscal PolicyFederal Reserve SystemRegulates the amount of money in the economyThe size of the money supply affects the health of the economy.The federal budgetThe government is spender and a taxer.Highways, public assistance, products, and services25% of a person’s incomeCut tax rates in a recession to stimulate spendingIncrease spending to stimulate jobs and income for people.
42Protecting the Environment Environmental Protection Agency (1970)
4316-3 Managing the EconomyPDN: Predict five things the government spends its money on.
44In 1835, under President Andrew Jackson, the US Federal Budget was balanced and the National Debt was paid in full. This has never happened since.In the economic boom of the Roaring '20s, the Federal Budget ran surpluses for ten consecutive years. This also has never happened since.In the 1930s and 1940s, depression and war initiated a half-century of chronic budget deficits. Money borrowed to pay these deficits steadily increased the National Debt.Budget surpluses became increasingly rare. During the 1970s and 1980s, the US Federal Budget ran deficits for twenty straight years. Finally in the 1990s, another economic boom enabled four years of budget surpluses. These surpluses temporarily halted the growth of the National Debt
4516-3: Managing the Economy PDN: Why is it important for the economy to get a “check up?” (3 lines) PDN: ¿Por qué es importante mirar la salud de la economía? (3 líneas)
47How does the government check the health of the economy? Inflation ratesGross Domestic Product (GDP)Federal Budget
48Gross Domestic Product the total dollar value of all final goods and services produced within the country in a yearGDPEconomyEconomyGDP
49Four Types of Goods/Services Consumer GDPGovernment GDPInvestment GDPNet Exports
50Inflation The general rise in prices. Inflation Economy Inflation
51One of the most closely watched signs of the economy’s health is the rate of inflation - (%) - difficult to control - rising prices - dollar has less power - people demand higher pay - businesses raise prices because of more expensive labor costs