GO#	  15	                                                                                U.S.	  Econo...
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Go #15 u.s. economy 2011 2012 completed

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Go #15 u.s. economy 2011 2012 completed

  1. 1.     GO#  15   U.S.  Economy       The  U.S.  economy  is  primary  a  free  market     economy;  but  because  there  is  some     __government_  involvement  it  is     characterized  as  a  __mixed  economy__      Markets  are  generally  allowed   Private  Property:  Individuals   Profit:  Profit  consists  of    to  operate  without  undo     and  businesses  have  the  right  to   earnings  after  all  expenses  have    interference  from  the   own  real  and  personal  property   been  paid    government   as  well  as  the  means  of    Prices  are  determined  by  supply   production  without  undue    and  demand  as  buyers  and   interference  from  the    sellers  interact  in  the   government    marketplace.       Competition:  Rivalry  between     Consumer  Sovereignty:   producers  and/or  between     Consumers  determine  through   sellers  of  a  good  or  service     purchases  what  goods  and  services   usually  results  in  better  quality     will  be  produced.    Government   goods  and  services  at  lower   involvement  in  the  economy  is     limited.    Most  decisions  regarding   prices     the  production  of  goods  and     services  are  made  in  the  private     sector.     _____________________________________________________________________________________   Circular  Flow     _Resources_,  __goods_  and  ___services__,  and  ___money__  flow  continuously  among  __households__,   __businesses_,  and  ___markets__  in  the  U.S.  Economy.       • Individual and business saving and investment provide financial capital that can be borrowed for business expansion and increased consumption. • Individuals (households) own the resources used in production, sell the resources, and use the income to purchase products. • Businesses (producers) buy resources; make products that are sold to individuals, other businesses, and the government; and use the profits to buy more resources. • Governments use tax revenue from individuals and businesses to provide public goods and services.                    
  2. 2.     Private  Financial  Institutions     Private  financial  institutions  act  as  __intermediaries__  between  _savers_  and  borrowers     that  include  households  and  business  investors.         •  Include  banks,  savings  and  loans,  and  credit  unions     •  Receive  deposits  and  make  loans       • Encourage  saving  and  investing  by  paying  interest  on  deposits         Business  Organization   There  are  three  basic  ways  that  businesses  organize  to  earn  profits.     Proprietorship     Partnership   Corporation   A  form  of  business     A  form  of  business   A  form  of  business  organization  organization  with  one  owner   organization  w   two  or   ith   that  is  authorized  by  law  to  act   who  takes  all  the  risks  and     more  owners  who  share  the   as  a  legal  entity  regardless  of   all  the  profits   risks  and  the    profits.   the  number  of  owners.  Owners     share  the  profits.  Owner  liability     is  limited  to  the  amount  of  their     investment.      Entrepreneur  • A person who takes a risk to produce and sell goods and services in search of profit• May establish a business according to any of the three types of organizational structures       Global  Economy   Reasons  that  states  and  nations  trade     • Worldwide markets in • To obtain goods and services they cannot produce or cannot produce which the buying and efficiently themselves   selling of goods and   • To buy goods and services at a lower cost or a lower opportunity cost services by all nations • To sell goods and services to other countries   takes place • To create jobs              Virginia  and  the  U.S.  Specialize  in  the  production  of  certain  goods  and  services,  which  promotes  efficiency  and  growth.       Impact  of  technological  innovations     • Innovations in technology (e.g., the Internet) contribute to the global flow of information, capital, goods, and services. • The  use  of  such  technology  also  lowers  the  cost  of   production.  

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