THE GOVERNMENT AND THE ECONOMY Unit 1

9/25/18 Agenda Opener Notes Handout over consumer protection agencies

OPENER 9/25/18 Copy the following terms mixed economy – a market economy in which the government owns some property, offers some kind of goods and services, and makes some rules that affect how businesses can compete. monopoly - when one company controls an entire industry without any competition tariffs – taxes on goods from other countries.

Learning Targets I understand how government policies promote competition, and why that is important. I understand how government policies have an effect on free trade

We call what the U.S. has a market economy – most goods and services are offered by private businesses As a result, companies must compete for your business competition is good for consumers. The more competition the lower the prices. A true market economy would allow companies to compete for business without government interference. Everything would be privately owned police force, schools, fire departments. etc. There would be no government interference at all.

WHAT PROBLEMS DO YOU THINK THIS COULD CAUSE? List 3 potential problems 1. 2. 3.

What the U.S. actually has is a mixed economy – a market economy in which the government owns some property, offers some kind of goods and services, and makes some rules that affect how businesses can compete. List property the government owns in the U.S. and 2 services government provides. 1. 2. 3. 4.

GOVERNMENT REGULATION A monopoly is when one company controls an entire industry without any competition. This is bad for consumers unless it is a natural monopoly -a market situation in which the costs of production are minimized by having a single firm produce the product. To prevent abuses with natural monopolies, the government regulates the sole provider.

Antitrust laws are intended to control monopoly power and to preserve and promote competition. The Sherman Antitrust Act of 1890 prohibits companies from any activity “in restraint of trade” meaning activity that reduces competition Clayton Antitrust act of 1914 – gives the U.S. government the power to prevent mergers if the merger will reduce competition. The Federal Trade Commission was created to carry out the powers of the Clayton Act.

The government also works to help U. S The government also works to help U.S. companies compete with foreign products. To do this they impose tariffs – taxes on goods from other countries. This makes foreign products more expensive. They also work to keep tariffs low on U.S. products in other countries.

The government also is involved in consumer protection, to carry out this task several executive agencies have been created complete the handout about these agencies.