1. Material things should not be the goal in life. - Job 31:24-28
Market Economies
Material things should not be the goal in life.
- Job 31:24-28

2. Values economic individualism consumer sovereignty profit motive
competition
private ownership of capital
the reign of “supply and demand” (price system)
material incentives
right to income
freedom to buy and sell
Little government intervention
Inequalities in wealth
private property
Laissez-faire
change encouraged

3. Adam Smith
Q: What ideas did Smith try to propagate? (Yes, I know that is a big word, but we also need to build your vocabulary!)

4. Features of a Market Economy
See “Big Economic Theory Sheets”
Questions and Commandments
Private Enterprise Economy Chart
Compare and Contrast Chart

5. Scarcity
How is scarcity dealt with in a market economy? Discuss

6. Economic Questions Answered
What goods and services should be produced?
A: Based on consumer demand
2) How should goods and services be produced?
A: through the least expensive and most efficient method; private business
3) How should the goods and services be distributed?
A: to those that can afford these items
4) Who answers these questions?
A: the market (interaction of buyers and sellers)

8. Business Cycle
LABEL:
Boom
Bust
Inflation
Spend
Save
Depression

9. Boom and Bust
Boom
Full employment
High inflation
High investment
High demand
Bust
High unemployment
Low inflation
Low investment
Low demand
Q: Do command economies experience the boom and bust cycle that are present in market economy? Explain

10. Q: Why is a rollercoaster analogous to the market economy?

13. Q: To which potential “pitfalls” of the market economy does the cartoon allude?

15. Inflation
INFLATION IS A PERSISTENT RISE over time in the average price of goods and services—in the "cost of living." Inflation and the risk of inflation encourage certain types of spending and investment decisions. A situation where inflation is low enough so that it no longer affects people's economic decisions is referred to as price stability.

16. Inflation Calculator
This website helps you understand the concept of inflation:

17. Inflation in Canada
Read the following information from the Bank of Canada: “The Benefits of Low Inflation”
Q: Why is inflation often a vicious cycle?

18. Fiscal Policy
The government’s use of taxing and spending to regulate and influence the economy

19. Monetary Policy
The government’s regulation of the supply of money to influence the economy

21. The Least You Need to Know…
Difference between theory and practice
Keynesian economics/demand-side econ.
The importance of change
Reaganomics/Supply-side economics

23. History of United States Economy
Limited Intervention (to 1929)
Government intervened very little in the economy.
All the government did was maintain public order, develop laws, provide roads and education, etc.
Government did not spend a lot of money and taxes were kept relatively low.

25. Great Depression ( )
Tuesday October 29, 1929—Stock Market Crash
Stocks were bought on borrowed money
People tried to get their money back by selling stocks quickly
People went bankrupt
Individual consumption of goods decreased.
In 1932, Franklin D. Roosevelt, Democratic presidential candidate campaigned on “Relief, Recovery, Reform.” Roosevelt was elected.
New Deal ( )
“Hundred Days”
Congress enacted legislation to help alleviate the economic crisis.

27. March 4, 2011

28. Property rights are to be protected
Proverbs 22:28

29. Unit ¾ Zimbabwe Read the news article related to inflation in Zimbabwe
Q: How could the inflationary pressures of Zimbabwe be solved through fiscal and monetary policies?