American Free Enterprise. Taught by Professor Coleman. Bellringer. Define “land of opportunity” P rovide examples of family or community members who started up small businesses. A Tradition of Free Enterprise. Why has America been such an economic success? Open land Natural resources
Taught by Professor Coleman
The social and political commitment to giving people the freedom and flexibility to try out their business ideas and compete in the marketplace
Can’t be taken from an individual except when there is a public reason
Government must pay fair value of property
Applies to businesses, too
Can only tax in ways Constitution allows
Congress can levy taxes
Direct taxes must be apportioned according to population
Guarantees the right to make binding contracts
Study of the behavior and decision making of entire economies
Study of the economic behavior and decision making of small units (individuals, families, households, business)
How the banking system operates throughout the U.S.
How an individual bank tries to make a profit by receiving deposits and making loans
NOW, YOU TRY!
How is economic well-being measured?
What’s a BUSINESS CYCLE?
Gross Domestic Product (GDP)
Total value of all final goods and services produced in an economy
Period of macroeconomic expansion followed by a period of contraction, or decline.
unemployment rate between 4% and 6% desirable
each generation should do better
measured by GDP
Gives consumers, producers, and investors confidence in the economy
Indicator #1: price levels
Indicator #2: Health of financial institutions
Do you expect your generation to have a higher standard of living than that of past generations?
DO YOUR PART! GET AN UNDERSTANDING OF MACROECONOMIC PROCESSES THAT SHAPE OUR FUTURES!
The Government’s Role
Process used to produce a good or service
Improvements allow an economy to produce more output form same or smaller quantity of inputs, or resources
Morrill Acts of 1862 and 1890?
Land-grant schools (MIT, Texas A&M)?
Compare and contrast the job of a librarian to the job of a government economist.
Benefits too many people (not just those who paid for it)
Buying/updating an eyesore . . .
Generate unintended costs
Paper mill wastes pollute river, need to buy water-treatment
Now, You Give Examples!
What is your personal definition of poverty?
For: Chapter 3 Self-Test
Web Code: mna-1031
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