Low Soo Peng America and Economy

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Low Soo Peng America and Economy

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Low Soo Peng America and Economy

  1. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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.

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