Chapter 3 : Lesson 3 Evaluating Economic Performance

Essential Question: Why might our economic goals change over time?

Minimum Wage: lowest legal wage that can be paid to most workers

Fixed Income : income that does not increase over time

Medicare : federal health insurance program for senior citizens, regardless of income

Inflation : rise in the general level of prices

7 Economic Goals

1. Economic Freedom Freedom to make your own economic decisions Allowing individuals to make economic choices about Earning income Owning property Purchasing goods and services

2. Economic Efficiency Maximizing output of goods and services from the resources available

3. Economic Equity Strong sense of justice, impartiality and fairness Dividing resources in a way that is considered fair

4.Economic Security and Predictability Assuring people that goods and services will be available Providing aid for retirement and in difficult times (social Security, Unemployment, Welfare)

5. Full Employment Economic system should provide as many jobs as possible No job = people can’t support themselves/family, nor can they produce goods & services for others Desirable unemployment rate = 4% - 5%

6. Price Stability Stable prices help avoid inflation (a rise in the general level of prices) Stability makes budgeting easier & adds a degree of certainty about the future

7. Economic Growth Standard of living—level of econ. well-being of people Necessary to provide more jobs and income for people

Resolving Trade-Off Among Goals #Trade-offs Necessary Some goals mutually conflict Can’t have full economic freedom and full economic security or equity # When goals are at odds, people must compare costs to benefits before resolving #the conflict. #The flexibility of the American economic system allows choices and compromises.

Review Question: Chapter 3 : Lesson 3 Read pages 87-91 and answer Review Questions on page 91. Hand in Google Class Room.

Make a crossword puzzle Voluntary Exchange Profit Motive Mixed Economy Consumer Sovereignty Minimum Wage Social Security Inflation Fixed Income Incentives GDP Competition Price Stability Economic Freedom Economic Equity