1. Overview of the U.S. Economy
Miss Smith
7th Grade Civics
*pgs (21.1)

2. Basic Economic Systems
The U.S. is considered a capitalist country because we have some government involvement
What is a traditional economy?
Why do you think most economies today are mixed economies? Because while most governments have a role in their country’s economy, people also have some control over what they produce and consume

3. The Free-Enterprise System
The U.S. has a free-enterprise economic system
Can own private property and use their own ideas to make money
Consumer- person who buys goods or services
Producer- person or company that provides goods or services
What major groups make decisions under the free-enterprise system? Consumers and producers

4. Circular-Flow Model
Diagram demonstrating how consumers, producers, and the government exchange resources, products, and money payments
Consists of goods, services, and resources moving in one direction and money moving in the opposite direction

6. Prices and Supply and Demand
The quantity demanded is the amount of a good and service that consumers are willing to buy at various possible prices
When prices go up, demand drops. When prices drop, demand goes up
Supply is the quantity of goods and services that producers are willing to offer at various possible prices
In what ways might productivity be able to increase demand for a product? By lowering prices, increasing advertising, or improving an existing version of a product

7. Economic rivalry among businesses selling similar products
Competition
Economic rivalry among businesses selling similar products

8. Investing directly in starting new businesses
Venture Capital
Investing directly in starting new businesses
What is venture capital?

9. Investment in Technology
Brings new products to the market
Encourages people to invest in a company’s stock