American Free Enterprise Goals: Identify and Describe the constitutional protections of free enterprise Explain the principles behind free enterprise Identify and Analyze the role of the consumer in a free enterprise Describe the role of the government in the American system

Constitutional Protections Property Rights 5 th Amendment- “(no person) shall be deprived of life, liberty or property without due process of law; nor shall private property be taken for public use, without just compensation” 14th Amendment carried it out to the state level. Protects Individuals and Corporations

Constitutional Protections cont. Taxation- Article 1 – power to levy taxes, but sections 2 & 9 = direct taxes according to population (all the same) In 1913- 16th Amendment – gave Congress right to taxes based on income Contracts – Article 1 Section 10- prohibits states and federal gov’t from passing laws that interfere with contracts – no wiggling out with political influence

Principles of Free Enterprise Profit Motive – drive to improve one’s financial and material well-being (firms or individuals) Open Opportunity- everyone can compete- there are no legal barriers to entering the market

Economic Rights Legal Equality – everyone is equal in the eyes of the law Private Property- private ownership and control is backed by laws and policies Free Contract & Voluntary Exchange- Producers and consumers decide when, where, and what they will buy/sell and can negotiate and agree to their own terms Healthy Competition is a result of the combination of the Principles and Economic Rights. Mixed Economies that encourage these tend to be successful and beneficial to their citizens.

Role of Consumer Consumer Sovereignty- the idea that the consumer/buyer has the larger share of power in the market Affects Producers- If no one is buyin’, they ain’t sellin’. Affects Government- Advisory Councils, Political Lobbies, Public Interest Groups

Kalteen Role of Government Information- Public Disclosure Laws, Prospectus’ for investments Protecting the People- i.e. Safety Labels, testing of toys, car safety regulations etc. Negative Effects? Kalteen

Macro vs. Micro Macroeconomics- study of behavior and decision-making of economics on a large scale (major trends, nations, world, etc) Microeconomics-study of behavior and decisions on a small scale i.e. families, individuals, businesses U.S. Gov’t seeks to influence macroeconomic behavior In order to see what is happening it looks at…

Gov’t Policies for Growth Employment- normal and desirable is 4%-6% Current – WI: 5.6% US: 6.1% (9/14) US Labor Stats. Growth- Measured by the GDP + or - Stability – Price levels (inflation, CPI) Financial Institutions inflation calculator

Innovation & Productivity US GDP = $53,143 World Avg. = $10,564 (2014) +GDP’s = constantly increasing productivity (pp curves) Work Ethic – commitment to the value of work and responsible , productive activity Technology- New products/processes Obsolete are recycled or repurposed

Role of Gov’t Research Grants – Land and/or $$ Gov’t Research – NASA Intellectual Property Rights Patent= 20 yrs exclusive rights of production Copyrights= authors have exclusive publishing rights Trademarks=right to a name, specific look or identifying feature