1. The United States Economic System
Topic 5
The United States Economic System

2. Why can we call it a “mixed” economic system?
People & firms are mostly free, but we have government interference in economy

3. What is Everyone’s Role?

4. The Entrepreneur Organize & manage land, labor, & capital
Search for profit
Bring new products to market
Increase competition
Lower prices

5. Entrepreneur's Key to Success
Expanding the market-advertising, international, target market
Customer Service
Customizing Product
Adapting to new technology
Efficient Production
Uniqueness
Reliability
Affordable
Good employee benefits - keeps them happy and working
Specialization
What characteristics of Free Enterprise do you see here? Explain how they relate.

6. The Consumer “Consumer sovereignty”: to vote with their dollars
To say what is & isn’t produced

7. The Government To protect consumer: laws
Provide goods & services: education, national defense, welfare
Regulate: preserve competition
Promote national goals: freedom, efficiency, growth, & stability

8. What is Free Enterprise?
Firms are free to operate for profit w/o gov’t interference beyond necessary regulation to protect public interest

9. 4 Characteristics of Free Enterprise
Economic Freedom: both individuals & business take chances & risks
Voluntary Exchange: freely & willingly engage in market transactions
Private Property: people have the right & privilege to control possessions
Profit motive: to risk savings on ventures in hopes of financial gain

10. Economic & Social Goals
1) Economic Freedom: make own decisions
2) Economic Efficiency: Not wasting the factors of production
3) Economic Equity: Equal pay for equal work; no discrimination

11. Economic & Social Goals (Continued)
4) Economic Security: protection against economic illnesses; layoffs, injury, (Social Security/Welfare/Medicare/etc.)
5) Full Employment: provide as many jobs as possible; Unemployment ONLY between 4% and 6%
6) Price Stability: gives certainty in prices; can expect inflation, protect fixed income individuals
7) Economic Growth: more $, more jobs, more goods