1. Rank these Goals Economic Growth Full Employment Economic Efficiency
Price Stability
Economic Freedom
Equitable Distribution of Income
Economic Security
Balance of Trade

2. Three Basic Economic Questions
In allocating resources, there are three basic economic questions that must be resolved by every society

3. Given that resources are scarce
An economic system must decide:
What to produce?
How to produce?
For Whom to produce?

4. What to produce
The question concerning the decision made by an economy about what and how much of a particular goods and services to produce with its limited resources.

5. How to produce?
The question concerning the decisions made by an economy about the technology used to produce a good and service.

6. For Whom to Produce?
The question concerning the decisions by an economy about income distribution – who gets how much of the goods and services produced.

7. The Four Economic Goals
The success of a societies economy is judged by four goals:
Economic Growth
Economic Efficiency
Full Employment
Price Stability

8. Economic Growth
A nation’s economy must grow for it to improve its standard of living: Level of economic prosperity
What kinds of things are included in standard of living?
This is especially true if the population is growing, the economy must also grow to provide new jobs and income.

9. Economic Efficiency
Resources are always scarce-countries must maximize what they will get with the resources they have to work with
Where on a PPF curve is their economic efficiency?

10. Full Employment
Full employment means that anyone willing and able to work can find a job
When this happens the country is maximizing productivity and using all of its labor resources
When there is unemployment, how could it be displayed on a PPF curve?

11. Price Stability Most people do not like uncertainty
We want to know that we can get milk and bread for a certain price
It is a goal governments to control inflation/deflation and keep the prices stable
Can you think of a way that producers keep prices stable, but still take away more profit?

12. Using the Economic Goals indicate witch goal satisfies each statement
Congress passes a tax act designed to stimulate investment in new capitol equipment
The Federal Reserve bank announces plans to fight inflation
Mega Motors Corporation announces plans to install robots on all assembly lines
The president announces a new program designed to find jobs for workers who are replaced by robots

13. Additional Goals that are also important to a society are called socioeconomic goals
Examples of Socioeconomic goals:
Protection of the environment
Financial security
Economic equity
Economic justice
Economic freedom

14. Sometimes there are trade-offs between economic goals and socioeconomic goals
In each situation explain the economic goal that will be promoted and the socioeconomic that will not be promoted
A farmer uses insecticides to produce more apples
A manufacturer uses robots to produce more goods at a lower cost

15. What do you think?
Put a R next to goals you think Republicans would value
Put a D next to goals you think Democrats would value
Economic Growth
Economic Efficiency
Full Employment
Price Stability
Protection of the environment
Financial security
Economic equity
Economic justice
Economic freedom

16. Political Spectrum Democrat Republicans
Liberals Tend to favor the environmental goals and economic equality
Republicans
Conservatives tend to favor economic freedom and Laissez Fair policies which means “let them do (as they please)”