Free Trade & State/Local Economies

Government Regulation of Competition Competition is GOOD!!!!! Monopolies: Market is controlled by one business - often results in high prices and low-quality products Sherman Anti-Trust Act (1890): Banned monopolies & illegal business combinations The government has used the Sherman Anti-Trust Act to prevent a single business owner from controlling prices & products JP Morgan’s Northern Securities in 1904 John D. Rockefeller’s Standard Oil in 1911 AT&T in 1974 Microsoft in 2004

Government Regulation of Competition Natural monopolies – LEGAL: Local utilities like water, electricity, natural gas, cable, etc. Competition isn’t efficient, so businesses are allowed to be monopolies but are heavily regulated by the govt. to ensure proper market practices. Oligopolies – market control by a few – LEGAL - Car manufacturers, oil companies, etc.

Government Regulation of Competition Mergers: Combination of businesses LEGAL as long as the merger does not create a monopoly. The govt. can prevent a merger that will cause one. Vertical integration: Merge different levels/stages of production. Horizontal integration: Merger of “like” companies for efficiency.

International Trade International trade is another way to promote competition and provide more options for consumers Countries specialize in certain products - For example, the U.S. cannot produce bananas Developing countries cannot produce airplanes, cars, etc. Countries produce what they are good at producing & export them to other countries. They import what they need.

International Trade Economic interdependence: All countries depend on one another to produce the things each country wants & needs. Environmental & political problems in one country can cause economic problems in other countries. Governments must make agreements with one another to ensure that their citizens have access to products from other countries.

International Trade Policies Free Trade Agreements: Nations agree to increase trade with one another and reduce barriers to trade, like tariffs & quotas.

International Trade Policies Protectionist Trade Policies: Many nations limit imports to protect domestic producers of the same product. Tariffs: Taxes on imports - Make prices for the imported goods more expensive Quotas: Limits on the number of imports

STATE & LOCAL ECONOMIES

TOP 10 U.S. EXPORTS

North Carolina’s Major Industries Agriculture Aquaculture Industry Furniture Forestry Textiles Defense

Agriculture Industry Tobacco, cotton, corn, peanuts, soybeans & wheat ¨Information and software technology, defense, automotive, financial services, green and sustainable energy, aerospace and aviation, biotechnology and pharmaceuticals. More of a global economy than ever Charlotte has the second largest number of banking headquarters in the U.S. Industry

Local Economy: Wake County Aside from agriculture (47th out of 100 counties in NC!), Wake County is also home to RTP RTP is a major industrial hub including industries such as Biotechnology and Life Sciences, Clean and Green Energy, Banking, Gaming, Information Technologies, and Wireless Communications