1. America’s Economic System
What are the benefits of America’s free economic system?
What role does government play in the American economic system?

2. What is the American economic system?
The US is a “free enterprise” economy
What is free enterprise?
Individuals control a society’s resources
Limited government involvement

3. Free Enterprise Economy
Command Economy
Free Enterprise Economy
USA
Mixed Economy

4. What are the basic principles behind a “free enterprise” economy?
Three (3) basic ideas:
Right to choice
Right to produce what you like
Right to turn a max. profit
Many of this basic ideas have influenced economies around the world today

5. What freedoms does the American economic system offer its citizens?
Five (5) major freedoms:
Right to private property
Open Opportunity
Legal equality
Free contracts
Profit motivation

6. Right to Private Property
“Free Enterprise” allows individuals to own their own property / materials
Land
Natural Resources
Ideas

7. Pennsylvania & Natural Gas

8. Open Opportunity
Anyone can take part / or not take part in the economy
Freedom of choice
Creates variety for citizens
Forces all business to be productive

9. Fast Food

10. Gas Stations

11. Supermarkets

12. Legal Equality
Everyone is protected by the same economic rights in the economy
Right to succeed
Right to fail

13. Free Contracts
People have a choice when it comes to entering agreements in the marketplace
Mortgages
Credit Cards
Checking Accounts

14. Profit Motivation
Encouraging people to improve themselves through economic activity
MAKE $$$$$$$
Encourages competition

15. It’s All About the Benjamins, baby….

16. How does “free enterprise” effectively eliminate scarcity?
Consumers have the freedom to look for the best deals out there
“Most bang for their bucks”
This tells entrepreneurs what a society wants
Effectively divides resources

17. What is the role of the US government in a “free enterprise” economy?
In theory, government has a limited role in “free enterprise”
However, government still needs money to operate
Has bills to pay
Debts to re-pay

18. What is the role of the US government in a modified “free enterprise” economy”?
Under a “modified” free enterprise economy:
Tax
Spend
Invest
Borrow money
Government becomes an active participant in the economy

19. Adam Smith’s “Invisible Hand”

20. The American government “hand”

21. What are the benefits of a modified “free enterprise” economy?
Government can use its money / power to try and provide the most good
Subsidies projects
Regulate industries
Protect workers
Provide unemployment

22. Federal subsidies

23. Regulating Industries

24. Protecting workers

25. Providing Unemployment

26. What are the drawbacks to a modified “free enterprise” economy?
Just like any businessman, government has the freedom to FAIL
Over-charge
Mismanage
Bad investments
Debt

27. The National Debt Clock