Economics - Intro to American economic history

Slide 1: The Free-Market Capitalist Economy

Slide 2: What is a Free Market Economy ?

Slide 3: Business governed by the laws of supply and demand, not restrained by government interference, regulation or subsidy. Physiocrats

Slide 4: The LAW OF SUPPLY The Law of Supply states that the quantity of a good supplied rises as the market price rises, and falls as the price falls

Slide 5: Law of Demand The Law of Demand says that the quantity of a good demanded falls as the price rises, and rises as the price falls.

Slide 6: Equilibrium Price The market price at which the supply of an item equals the quantity demanded.

Slide 7: American Capitalism: A Short History • American Revolution was caused partly by Britain’s policy of Mercantilism • Framers of the Constitution were gentry and merchants • Admired Adam Smith’s Wealth of Nations

Slide 8: The U.S. Constitution • Federalism limited power of States on economic matters • Limited the power of Federal Government to tax, regulate, spend. • Protected the Right of Property - 5th Amendment

Slide 9: Chief Justice John Marshall • Ruled consistently in favor of free-markets over regulation by states • Ruled against grants of monopoly by states • Ruled for Federal power over State’s Rights

Slide 10: The Great Depression & New Deal 1933 -1941

Slide 11: The Era of Big Government Begins