Section Outline 1 of 9 Government’s Role In Our Economy Section 2: Government’s Efforts to Solve Economic Problems I.Ensuring Fair Business Practices II.Protecting Workers and Consumers III.Providing Economic Security IV.Maintaining Economic Stability Section Reading Support Transparency V.Protecting the Environment

2 of 9 Government’s Role In Our Economy Section 2: Government’s Efforts to Solve Economic Problems Main Idea The federal government has a variety of solutions to the problems created by a self- regulating free-enterprise system. Key Terms Trust Monopoly Business cycle Monetary policy Fiscal policy

Ensuring Fair Business Practices In a free-enterprise system there were no rules for the operation of businesses. —Trust: a group of companies organized to benefit from the high prices they all agree to charge —Monopoly: a single business with sole power over the prices in the market The game called “Monopoly” debuted in of 9 Government’s Role In Our Economy Section 2: Government’s Efforts to Solve Economic Problems

4 of 9 Government’s Role In Our Economy Section 2: Government’s Efforts to Solve Economic Problems Ensuring Fair Business Practices (continued) Controlling Monopolies —American became angry about the growth of monopolies; prices had become unreasonable. —The Sherman and Clayton Antitrust Acts banned unfair monopolies. Allowing Legal Monopolies —The government does not oppose all monopolies; public utilities are monopolies. Banning False Advertising, 1938 —Congress banned “unfair or deceptive practices.”

5 of 9 Government’s Role In Our Economy Section 2: Government’s Efforts to Solve Economic Problems Protecting Workers and Consumers Safe Working Conditions —National Labor Relations Act (1935) —Fair Labor Standards Act (1938) —Occupational Safety and Health Administration (1971) Safe Products —Food and Drug Administration (1927) —Consumer Product Safety Commission (1972)

6 of 9 Government’s Role In Our Economy Section 2: Government’s Efforts to Solve Economic Problems Providing Economic Security The Great Depression ( ) —Long period of economic hardship Franklin Roosevelt —The New Deal Social Security Act, 1935: A monthly payment program for workers. This program served as insurance against injury, unemployment, or death. Public Assistance: Cash payments and various services were provided to those in need by federal, state, and local governments.

7 of 9 Government’s Role In Our Economy Section 2: Government’s Efforts to Solve Economic Problems Maintaining Economic Stability Business Cycle —The alternating ups of growth and the downs of recession Monetary Policy —Regulation of the money supply by the Federal Reserve System Fiscal Policy —The government’s decisions about the amount of money it spends and the amount it collects in taxes

8 of 9 Government’s Role In Our Economy Section 2: Government’s Efforts to Solve Economic Problems Protecting the Environment The Environmental Protection Agency —Created in 1970, with the passage of the Environmental Protection Act. —The agency controls pollution by making rules about what and how much can be discharged into the air, water, and soil.

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