1. America’s Economic System What are the benefits of America’s free economic system? What role does government play in the American economic system? What are the benefits of America’s free economic system? What role does government play in the American economic system?

2. What is the American economic system?  The US is a “free enterprise” economy  What is free enterprise?  Individuals control a society’s resources  Limited government involvement  The US is a “free enterprise” economy  What is free enterprise?  Individuals control a society’s resources  Limited government involvement

3. Command Economy Free Enterprise Economy Mixed Economy USA

4. What are the basic principles behind a “free enterprise” economy?  Three (3) basic ideas:  Right to choice  Right to produce what you like  Right to turn a max. profit  Many of this basic ideas have influenced economies around the world today  Three (3) basic ideas:  Right to choice  Right to produce what you like  Right to turn a max. profit  Many of this basic ideas have influenced economies around the world today

5. What freedoms does the American economic system offer its citizens?  Five (5) major freedoms:  Right to private property  Open Opportunity  Legal equality  Free contracts  Profit motivation  Five (5) major freedoms:  Right to private property  Open Opportunity  Legal equality  Free contracts  Profit motivation

6. Right to Private Property  “Free Enterprise” allows individuals to own their own property / materials  Land  Natural Resources  Ideas  “Free Enterprise” allows individuals to own their own property / materials  Land  Natural Resources  Ideas

7. Pennsylvania & Natural Gas

8. Open Opportunity  Anyone can take part / or not take part in the economy  Freedom of choice  Creates variety for citizens  Forces all business to be productive  Anyone can take part / or not take part in the economy  Freedom of choice  Creates variety for citizens  Forces all business to be productive

9. Fast Food

10. Gas Stations

11. Supermarkets

12. Legal Equality  Everyone is protected by the same economic rights in the economy  Right to succeed  Right to fail  Everyone is protected by the same economic rights in the economy  Right to succeed  Right to fail

13. Free Contracts  People have a choice when it comes to entering agreements in the marketplace  Mortgages  Credit Cards  Checking Accounts  People have a choice when it comes to entering agreements in the marketplace  Mortgages  Credit Cards  Checking Accounts

14. Profit Motivation  Encouraging people to improve themselves through economic activity  MAKE $$$$$$$  Encourages competition  Encouraging people to improve themselves through economic activity  MAKE $$$$$$$  Encourages competition

15. It’s All About the Benjamins, baby….

16. How does “free enterprise” effectively eliminate scarcity?  Consumers have the freedom to look for the best deals out there  “Most bang for their bucks”  This tells entrepreneurs what a society wants  Effectively divides resources  Consumers have the freedom to look for the best deals out there  “Most bang for their bucks”  This tells entrepreneurs what a society wants  Effectively divides resources

17. What is the role of the US government in a “free enterprise” economy?  In theory, government has a limited role in “free enterprise”  However, government still needs money to operate  Has bills to pay  Debts to re-pay  In theory, government has a limited role in “free enterprise”  However, government still needs money to operate  Has bills to pay  Debts to re-pay

18. What is the role of the US government in a modified “free enterprise” economy”?  Under a “modified” free enterprise economy:  Tax  Spend  Invest  Borrow money  Government becomes an active participant in the economy  Under a “modified” free enterprise economy:  Tax  Spend  Invest  Borrow money  Government becomes an active participant in the economy

19. Adam Smith’s “Invisible Hand”

20. The American government “hand”

21. What are the benefits of a modified “free enterprise” economy?  Government can use its money / power to try and provide the most good  Subsidies projects  Regulate industries  Protect workers  Provide unemployment  Government can use its money / power to try and provide the most good  Subsidies projects  Regulate industries  Protect workers  Provide unemployment

22. Federal subsidies

23. Regulating Industries

24. Protecting workers

25. Providing Unemployment

26. What are the drawbacks to a modified “free enterprise” economy?  Just like any businessman, government has the freedom to FAIL  Over-charge  Mismanage  Bad investments  Debt  Just like any businessman, government has the freedom to FAIL  Over-charge  Mismanage  Bad investments  Debt

27. The National Debt Clock