The United States government promotes competition through enforcing antitrust laws to prevent monopolies, engaging in global trade, and supporting business start-ups. It regulates competition through agencies like the FCC, EPA, and FTC that oversee business practices. The government also provides public goods and services like roads, education, and national defense that benefit many people but would not be efficiently provided by private businesses alone.

1. The role of government inThe role of government in
the United States economythe United States economy
How does the United StatesHow does the United States
government promote and regulategovernment promote and regulate
competition?competition?

2. Role of GovernmentRole of Government
 The governmentThe government
promotes and regulatespromotes and regulates
competition.competition.
 Ways the governmentWays the government
promotespromotes
marketplacemarketplace
competitioncompetition
 Enforcing antitrustEnforcing antitrust
legislation to discouragelegislation to discourage
the development ofthe development of
monopoliesmonopolies
 Engaging in global tradeEngaging in global trade
 Supporting businessSupporting business
start-upsstart-ups

3. Role of GovernmentRole of Government
 Government agenciesGovernment agencies
that regulatethat regulate
businessbusiness
 FCCFCC (Federal(Federal
CommunicationsCommunications
Commission)Commission)
 EPAEPA (Environmental(Environmental
Protection Agency)Protection Agency)
 FTCFTC (Federal Trade(Federal Trade
Commission)Commission)
 These agencies overseeThese agencies oversee
the way individuals andthe way individuals and
companies do businesscompanies do business

4. Role of GovernmentRole of Government
 Government provides public goods andGovernment provides public goods and
services that individuals acting alone couldservices that individuals acting alone could
not provide efficiently.not provide efficiently.
 Things like roads and transportation, andThings like roads and transportation, and
education are services that theeducation are services that the
government helps to fund. It would be toogovernment helps to fund. It would be too
expensive for private business to provideexpensive for private business to provide
these services to the public.these services to the public.

5. Role of GovernmentRole of Government
 What are publicWhat are public
goods and services?goods and services?
 Include such items asInclude such items as
interstate highways,interstate highways,
postal service, andpostal service, and
national defensenational defense
 Provide benefits toProvide benefits to
many simultaneouslymany simultaneously
 Would not beWould not be
available if individualsavailable if individuals
had to provide themhad to provide them

6. Role of GovernmentRole of Government
 How do governmentsHow do governments
produce public goodsproduce public goods
and services?and services?
 Through tax revenueThrough tax revenue
 Through borrowedThrough borrowed
fundsfunds

7. Role of GovernmentRole of Government
 What is the impact ofWhat is the impact of
taxation on the type oftaxation on the type of
things thatthings that
government cangovernment can
provide to theprovide to the
people?people?
 Government taxGovernment tax
increases reduce theincreases reduce the
funds available forfunds available for
private and businessprivate and business
spending; taxspending; tax
decreases increasedecreases increase
funds for private andfunds for private and
business spending.business spending.

8. Role of the GovernmentRole of the Government
 How does the money thatHow does the money that
the government borrowsthe government borrows
affect economic activity?affect economic activity?
 Increased governmentIncreased government
borrowing reduces fundsborrowing reduces funds
available for borrowing byavailable for borrowing by
individuals andindividuals and
businesses; decreasedbusinesses; decreased
government borrowinggovernment borrowing
increases funds availableincreases funds available
for borrowing byfor borrowing by
individuals andindividuals and
businesses.businesses.

9. Role of the GovernmentRole of the Government
 How does governmentHow does government
spending affect economicspending affect economic
activity?activity?
 Increased governmentIncreased government
spending increasesspending increases
demand, which maydemand, which may
increase employment andincrease employment and
production; decreasedproduction; decreased
spending reducesspending reduces
demand, which maydemand, which may
result in a slowing of theresult in a slowing of the
economy.economy.
 Increased governmentIncreased government
spending may result inspending may result in
higher taxes; decreasedhigher taxes; decreased
government spendinggovernment spending
may result in lower taxes.may result in lower taxes.

10. Role of the GovernmentRole of the Government
 What is the 16What is the 16thth
Amendment to theAmendment to the
Constitution, and why is itConstitution, and why is it
important?important?
 The 16th Amendment toThe 16th Amendment to
the Constitution of thethe Constitution of the
United States of AmericaUnited States of America
authorizes Congress toauthorizes Congress to
tax incomes (personaltax incomes (personal
and business).and business).
 This provided moreThis provided more
money for themoney for the
government to fund thegovernment to fund the
projects that it needed toprojects that it needed to
pay for so that the U.S.pay for so that the U.S.
economy could grow.economy could grow.

11. Role of the GovernmentRole of the Government
 How does the FederalHow does the Federal
Reserve SystemReserve System
regulates the moneyregulates the money
supply ?supply ?
 The Federal ReserveThe Federal Reserve
System (Fed) is theSystem (Fed) is the
central bank of thecentral bank of the
United States.United States.
 Federal ReserveFederal Reserve
banks act as abanks act as a
banker’s bank bybanker’s bank by
issuing currency andissuing currency and
regulating the amountregulating the amount
of money inof money in
circulation.circulation.

12. Role of the GovernmentRole of the Government
 The Federal ReserveThe Federal Reserve
System, acting as theSystem, acting as the
central bank,central bank,
regulates the moneyregulates the money
supply.supply.
 To slow the economy,To slow the economy,
the Federal Reservethe Federal Reserve
Bank restricts theBank restricts the
money supply,money supply,
causing interest ratescausing interest rates
to rise; to stimulateto rise; to stimulate
the economy the Fedthe economy the Fed
increases the moneyincreases the money
supply, causingsupply, causing
interest rates tointerest rates to
decline.decline.

13. Role of the GovernmentRole of the Government
 What is the role of theWhat is the role of the
Federal ReserveFederal Reserve
System in maintainingSystem in maintaining
a stable economy?a stable economy?
 Ways the FederalWays the Federal
Reserve BankReserve Bank
slows theslows the
economyeconomy
 Increases the reserveIncreases the reserve
requirementrequirement
 Raises the discountRaises the discount
raterate
 Sells governmentSells government
securitiessecurities

14. Role of the GovernmentRole of the Government
 What is the role of theWhat is the role of the
Federal ReserveFederal Reserve
System in maintainingSystem in maintaining
a stable economy?a stable economy?
 Ways the FederalWays the Federal
Reserve BankReserve Bank
stimulates thestimulates the
economyeconomy
 Lowers the reserveLowers the reserve
requirementrequirement
 Lowers the discountLowers the discount
raterate
 PurchasesPurchases
government securitiesgovernment securities

15. Role of the GovernmentRole of the Government
 What is the role of theWhat is the role of the
United StatesUnited States
government ingovernment in
protecting consumerprotecting consumer
rights and propertyrights and property
rights?rights?
 The United StatesThe United States
government passesgovernment passes
laws and createslaws and creates
agencies to protectagencies to protect
consumer rights andconsumer rights and
property rights.property rights.

16. Role of the GovernmentRole of the Government
 What is the role of theWhat is the role of the
United StatesUnited States
government in protectinggovernment in protecting
consumer rights andconsumer rights and
property rights?property rights?
 Individuals have the rightIndividuals have the right
of private ownership,of private ownership,
which is protected bywhich is protected by
negotiated contracts thatnegotiated contracts that
are enforceable by law.are enforceable by law.
 Government agenciesGovernment agencies
establish guidelines thatestablish guidelines that
protect public health andprotect public health and
safety.safety.
 Consumers may takeConsumers may take
legal action againstlegal action against
violations of consumerviolations of consumer
rights.rights.