1. CONTEMPORARY ECONOMICS© Thomson South-Western 3.2Regulating the Private Sector  Explain how government can improve operation of the private sector.  Distinguish between regulations that promote competition and those that control natural monopolies.  Describe how fiscal policy and monetary policy try to control the business cycle. Objectives

2. CONTEMPORARY ECONOMICS© Thomson South-Western 3.2Regulating the Private Sector  private property rights  antitrust laws  natural monopoly  fiscal policy  monetary policy Key Terms

3. CONTEMPORARY ECONOMICS© Thomson South-Western 3.2 Regulating the Private Sector SLIDE 3 Rules for a Market Economy The effects of government regulation are all around you. Examples Clothing labels Speed limits

4. CONTEMPORARY ECONOMICS© Thomson South-Western 3.2 Regulating the Private Sector SLIDE 4 Establishing Private Property Rights Private property rights guarantee individuals the right to use their resources as they choose or to charge others for the use.

5. CONTEMPORARY ECONOMICS© Thomson South-Western 3.2 Regulating the Private Sector SLIDE 5 Intellectual Property Rights Patent Copyright Trademark

6. CONTEMPORARY ECONOMICS© Thomson South-Western 3.2 Regulating the Private Sector SLIDE 6 Measurement and Safety U.S. Bureau of Weights and Measures The U.S. Food and Drug Administration (FDA) The U.S. Department of Agriculture The Consumer Product Safety Commission

7. CONTEMPORARY ECONOMICS© Thomson South-Western 3.2 Regulating the Private Sector SLIDE 7 Market Competition and Natural Monopolies Promoting market competition Antitrust laws attempt to promote competition and reduce anticompetitive behavior. Regulating natural monopolies When it is cheaper for one firm to serve the market than for two or more firms to do so, that firm is called a natural monopoly.

8. CONTEMPORARY ECONOMICS© Thomson South-Western 3.2 Regulating the Private Sector SLIDE 8 Growth and Stability of the U.S. Economy Fiscal policy uses taxing and public spending to influence national economic variables. Monetary policy tries to supply the appropriate amount of money to help stabilize the business cycle and promote healthy economic growth.