1. 2.2: Evaluating
Economic
Performance &
Economic Goals

2. Evaluate the trade-offs among economic & social goals.
Objectives
Describe the basic social & economic goals used to evaluate economic performance.
Evaluate the trade-offs among economic & social goals.

3. Every economic system has goals
Goals serve as benchmarks that determine if the system meets most/all of its people’s needs
The U.S. has 7 major economic & social goals:

4. People want to choose own occupations, employers, uses for their $
1. Economic Freedom
People want to choose own occupations, employers, uses for their $
Businesses want to choose where & how to produce

5. Factors of production must be used wisely
2. Economic Efficiency
Factors of production must be used wisely
Waste yields less goods & services = fewer wants & needs satisfied

6. We have a strong sense of economic fairness, justice & impartiality
3. Economic Equity
We have a strong sense of economic fairness, justice & impartiality
No discrimination in employment, no false advertising, laws protecting consumers

7. We want protection in case of:
4. Economic Security
We want protection in case of:
Illness – health insurance
Layoffs – unemployment compensation
Retirement – Social Security

8. Economic system should provide as many jobs as possible
5. Full Employment
Economic system should provide as many jobs as possible
No job = people can’t support themselves/family, nor can they produce goods & services for others
Desirable unemployment rate = 4% - 5%

9. 6. Price Stability
Stable prices help avoid inflation (a rise in the general level of prices)
Stability makes budgeting easier & adds a degree of certainty about the future

10. People can have more goods & services
7. Economic Growth
People can have more goods & services
Our population is likely to rise; growth is necessary to meet everyone’s needs

11. Most people agree these 7 goals are necessary for our system to work; what people may disagree on is their ideas about how to reach them
Our economic system is flexible enough to allow choices, accommodate compromises & satisfy most Americans most of the time