1. Government’s Role in the U.S. Economy
Miss Smith
7th Grade Civics
*pgs (21.3)

2. Government Regulation
Five main goals
Protect workers
Protect consumers
Limits negative effects
Encourages competition
Regulates property

3. Protect Workers The Equal Employment Opportunity Commission (EEOC)
prohibits businesses from discriminant actions
The Occupational Safety and Health Administration (OSHA)
makes sure employees have safe working conditions

4. Protecting Consumers The Food and Drug Administration (FDA)
protects people from unsafe medicines and food
The Consumer Product Safety Commission (CPSC)
makes certain that items, such as toys, are not dangerous
Can you think of another gov. agency that protects consumers? FDIC

5. Limiting Negative Effects
The Environmental Protection Agency (EPA)
regulates industries to prevent air and water pollution

6. Encouraging Competition
The U.S. Department of Justice and the Federal Trade Commission (FTC)
supervise corporate behaviors to make sure companies fairly compete with one another

7. Regulating Private Property
Zoning laws limit certain types of economic activities to specific areas
Ex: A zoning law may allow a factory to be built in an industrial area but ban it in a residential area

8. Fiscal Policy Taxes Public Transfer Payments
Higher taxes means citizens can’t buy as many goods or services, so the economy slows down
Lower taxes means citizens have more money to spend on goods and services, so the economy speeds up
Public Transfer Payments
The government provides unemployment compensation so citizens can still buy goods and services while unemployed
Why do you think fiscal policy sometimes takes a long time to affect the economy? It takes time for the government to set up and approve a policy

9. Monetary Policy
Easy-money policy: strategy to increase the amount of money in the supply to encourage growth because it increases demand
Tight-money policy: strategy to decrease the amount of money in circulation to slow economic growth
Open-market operations: buying and selling government bonds
Reserve requirement: amount of money banks must have available at all times
If you were a business owner and you knew that the Fed was planning to decrease the money supply, what might you do? You might borrow any money you need before interest rates go up and you might not plan to expand your business in the near future