1. © SOUTH-WESTERN  12.1 Students understand common terms & concepts and economics reasoning. Standard Address: CONTEMPORARY ECONOMICS: LESSON 3.21

2. © SOUTH-WESTERNCONTEMPORARY ECONOMICS: LESSON 3.22 LESSON 3.2 Regulating the Private Sector  Explain how government, by establishing laws and regulations, can improve operation of the private sector.  Distinguish between regulations that promote competition and those that control natural monopolies.  Describe how fiscal policy and monetary policy reduce the ups and down of the business cycle. Objectives

3. © SOUTH-WESTERNCONTEMPORARY ECONOMICS: LESSON 3.23 LESSON 3.2 Regulating the Private Sector  private property rights  antitrust laws  natural monopoly  fiscal policy  monetary policy Key Terms

4. © SOUTH-WESTERNCONTEMPORARY ECONOMICS: LESSON 3.24 Rules for a Market Economy  Establish property rights  Intellectual property rights  Measurement and safety

5. © SOUTH-WESTERNCONTEMPORARY ECONOMICS: LESSON 3.25 Establishing Property Rights  Private property rights guarantee individuals the right to use their resources as they choose or to charge others for the use.  Governments play a role in safeguarding private property by establishing legal rights of ownership.

6. © SOUTH-WESTERNCONTEMPORARY ECONOMICS: LESSON 3.26 Intellectual Property Rights Laws also grant property rights to the creators of new ideas and new inventions.  Patent  Copyright  Trademark

7. © SOUTH-WESTERNCONTEMPORARY ECONOMICS: LESSON 3.27 Measurement and Safety  U.S. Bureau of Weights and Measures  The U.S. Food and Drug Administration (FDA)  The U.S. Department of Agriculture  The Consumer Product Safety Commission

8. © SOUTH-WESTERNCONTEMPORARY ECONOMICS: LESSON 3.28 How can laws and regulations improve the operation of the private sector?  Laws and regulations improve the operation of the private sector by providing a standard that everyone must meet and abide by.  They allow the private sector to operate with order and fairness. Checkpoint: Pg70

9. © SOUTH-WESTERNCONTEMPORARY ECONOMICS: LESSON 3.29 Market Competition and Natural Monopolies  Adam Smith’s argument that the invisible hand of market competition harnesses self-interest to promote the general good.  A business owner would prefer to be a monopolist – that is, to be the only seller a product.

10. © SOUTH-WESTERNCONTEMPORARY ECONOMICS: LESSON 3.210 Market Competition and Natural Monopolies  Promoting market competition  Antitrust laws attempt to promote competition and reduce anticompetitive behavior.

11. © SOUTH-WESTERNCONTEMPORARY ECONOMICS: LESSON 3.211 Market Competition and Natural Monopolies  Regulating natural monopolies  When it is cheaper for one firm to serve the market than for two or more firms to do so, that firm is called a natural monopoly.  Government-owned and government- regulated monopolies are called public utilities.

12. © SOUTH-WESTERNCONTEMPORARY ECONOMICS: LESSON 3.212 Why does government promote competition in some markets and control natural monopolies in others?  Government promotes competition in some industries, such as retail, because the industry operates more efficiently under competition.  In other cases, such as utilities, government promotes natural monopolies because the industry operates more efficiently in monopolies.  For industries that require regulation, it is easier for the government to provide that regulation in a monopoly setting. Checkpoint: Pg71

13. © SOUTH-WESTERNCONTEMPORARY ECONOMICS: LESSON 3.213 Growth and Stability of the U.S. Economy  Fiscal policy uses taxing and public spending to influence national economic variables.  When economist study fiscal policy, they usually focus on the federal government, although governments at all levels effect the economy.

14. © SOUTH-WESTERNCONTEMPORARY ECONOMICS: LESSON 3.214 Growth and Stability of the U.S. Economy  Monetary policy tries to supply the appropriate amount of money to help stabilize the business cycle and promote healthy economic growth.

15. © SOUTH-WESTERNCONTEMPORARY ECONOMICS: LESSON 3.215 How do fiscal policy and monetary policy reduce the ups and down of the business cycle?  Fiscal policy works by allowing the government to offset a slowdown in economic activity in the private sector by cutting taxes to stimulate consumption and investment.  The Monetary policy works by putting more money into circulation during slow economic times to lower interest rates and encourage borrowing and spending. Checkpoint: Pg72

16. © SOUTH-WESTERNCONTEMPORARY ECONOMICS: LESSON 3.216

17. © SOUTH-WESTERNCONTEMPORARY ECONOMICS: LESSON 3.117 Key Concepts #1. #2. #3. #4. Assessment

18. © SOUTH-WESTERNCONTEMPORARY ECONOMICS: LESSON 3.118 Key Concepts Assessment

19. © SOUTH-WESTERNCONTEMPORARY ECONOMICS: LESSON 3.119 Key Concepts #5. Faster growth in money seems to cause lower interest rates, while slower growth or decline in money casue higher interests rates. Assessment