Bellwork Write Five sentences about how you feel about your performance in the class so far.

Chapter 3 American Free Enterprise EQ: HOW DOES THE PUBLIC SECTOR AND THE PRIVATE SECTOR INTERACT TO MAINTAIN A STABLE, EFFICIENT, AND GROWING ECONOMY?

Chapter Objectives Describe the tradition of free enterprise in the US Explain the basic principles of the free enterprise system Identify the roles of the consumer and the government in the free enterprise system Analyze how the government promotes economic strength For today: only write the slides with the ** EQ: HOW DOES THE PUBLIC SECTOR AND THE PRIVATE SECTOR INTERACT TO MAINTAIN A STABLE, EFFICIENT, AND GROWING ECONOMY?

Section 1: Benefits of Enterprise Open land, natural resources, and immigrants Free Enterprise- the social and political commitment to giving people the freedom & flexibility to try out their business ideas and compete in the marketplace -The U.S. Constitution safeguards these rights -private property rights (5th/14th amendments) -restricts unfair taxation, allows binding contracts EQ: HOW DOES THE PUBLIC SECTOR AND THE PRIVATE SECTOR INTERACT TO MAINTAIN A STABLE, EFFICIENT, AND GROWING ECONOMY?

**What is American Free Enterprise?** Profit Motive—force to improve material well-being Competition—rivalry to attract customers & lower costs Private Property Rights—you own your possessions Voluntary Exchange—you may decide what & when to buy & sell Open Opportunity—everyone can compete Free Contract—you decide what agreements to enter into Legal Equality—everyone has the same legal rights Public Disclosure Laws—companies provide full information EQ: HOW DOES THE PUBLIC SECTOR AND THE PRIVATE SECTOR INTERACT TO MAINTAIN A STABLE, EFFICIENT, AND GROWING ECONOMY?

Basic Principles of Free Enterprise The American economy rests on a recognition of the importance of the profit motive. Meaning business owners and managers make the choices themselves, operating in ways they believe will maximize their profits. EQ: HOW DOES THE PUBLIC SECTOR AND THE PRIVATE SECTOR INTERACT TO MAINTAIN A STABLE, EFFICIENT, AND GROWING ECONOMY?

**Roles** Role of the Government- Role of the Consumer- Gov’t regulations- protect property rights, contracts, and other business activities Consumer protection- example: safe drugs/food Public disclosure laws- requires companies to give consumers info about their products Environmental Protection Role of the Consumer- have freedom to make their own economic choices -Consumers influence producers through their buying decisions. Consumers influence the government’s economic policies through voting and joining interests groups which persuade public officials to act or vote according to interests of the group members EQ: HOW DOES THE PUBLIC SECTOR AND THE PRIVATE SECTOR INTERACT TO MAINTAIN A STABLE, EFFICIENT, AND GROWING ECONOMY?

Public interest can be described as concerns of the public as a whole. The Public Interest Public interest can be described as concerns of the public as a whole. Government responds to public interest by enacting public policy, or laws and standards on topics of public interest. Consumers can influence public policy through voting or by joining an interest group, which is a private organization that tries to persuade public officials. Consumers are aided by public disclosure laws, which require companies to give consumers full information about their products. EQ: HOW DOES THE PUBLIC SECTOR AND THE PRIVATE SECTOR INTERACT TO MAINTAIN A STABLE, EFFICIENT, AND GROWING ECONOMY?

**Section 2: Promoting Economic Strength Because the market is vulnerable to business cycles, the government creates public policies that aim to stabilize the economy 3 Main Outcomes: High employment Steady growth Stable prices EQ: HOW DOES THE PUBLIC SECTOR AND THE PRIVATE SECTOR INTERACT TO MAINTAIN A STABLE, EFFICIENT, AND GROWING ECONOMY?

Promoting Economic Strength Policymakers pursue three main outcomes as they seek to stabilize the economy. EQ: HOW DOES THE PUBLIC SECTOR AND THE PRIVATE SECTOR INTERACT TO MAINTAIN A STABLE, EFFICIENT, AND GROWING ECONOMY?

High Employment Provide jobs for everyone who is able to work Keep unemployment rate between 4-6% EQ: HOW DOES THE PUBLIC SECTOR AND THE PRIVATE SECTOR INTERACT TO MAINTAIN A STABLE, EFFICIENT, AND GROWING ECONOMY?

Steady Growth Enjoy higher standard of living Economy must grow to provide additional goods and services EQ: HOW DOES THE PUBLIC SECTOR AND THE PRIVATE SECTOR INTERACT TO MAINTAIN A STABLE, EFFICIENT, AND GROWING ECONOMY?

Stable Prices Gives people confidence in the economy Stable banks and freedom from fraud Government wants to prevent sudden, drastic shifts in prices -If prices increase, this puts a strain on consumers, especially people like Miss Eilers, who is on a fixed income and strict budget. How? EQ: HOW DOES THE PUBLIC SECTOR AND THE PRIVATE SECTOR INTERACT TO MAINTAIN A STABLE, EFFICIENT, AND GROWING ECONOMY?

Regulating Protecting health, safety & well-being Can you identify these agencies and their purpose? FDA food, drugs, cosmetics FTC unfair business practices FCC radio, TV, wire, satellite, cable, phone FAA airline safety, air-traffic EQ: HOW DOES THE PUBLIC SECTOR AND THE PRIVATE SECTOR INTERACT TO MAINTAIN A STABLE, EFFICIENT, AND GROWING ECONOMY?

Encouraging Innovation The government encourages the development of new technologies in several ways. Technology is the process used to produce a good or service. Federal agencies fund many research and development projects. Also, new technology often evolves out of government research. A patent gives the inventor of a new product the exclusive right to produce and sell it for 20 years. EQ: HOW DOES THE PUBLIC SECTOR AND THE PRIVATE SECTOR INTERACT TO MAINTAIN A STABLE, EFFICIENT, AND GROWING ECONOMY?

Section Review 1. Policymakers encourage all of the following EXCEPT (a) stable productivity. (b) high employment. (c) stable prices. (d) steady growth. 2. The government encourages advances in technology and improvements in productivity by (a) maintaining steady price controls. (b) funding research and development projects at many levels. (c) hiring more workers to reduce unemployment. (d) regulating banks and other financial institutions. EQ: HOW DOES THE PUBLIC SECTOR AND THE PRIVATE SECTOR INTERACT TO MAINTAIN A STABLE, EFFICIENT, AND GROWING ECONOMY?

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