ch. 23 government & the economy standard ee. how does the govt help the needy??? what is: wic...
TRANSCRIPT
![Page 1: Ch. 23 Government & the Economy Standard EE. How does the Govt help the needy??? What is: WIC Welfare Unemployment Social Security Income](https://reader036.vdocuments.us/reader036/viewer/2022062519/5697bfd71a28abf838cae9b7/html5/thumbnails/1.jpg)
Ch. 23 Government & the Economy
Standard EE
![Page 2: Ch. 23 Government & the Economy Standard EE. How does the Govt help the needy??? What is: WIC Welfare Unemployment Social Security Income](https://reader036.vdocuments.us/reader036/viewer/2022062519/5697bfd71a28abf838cae9b7/html5/thumbnails/2.jpg)
How does the Govt help the needy???• What is:
•WIC•Welfare•Unemployment•Social Security Income
![Page 3: Ch. 23 Government & the Economy Standard EE. How does the Govt help the needy??? What is: WIC Welfare Unemployment Social Security Income](https://reader036.vdocuments.us/reader036/viewer/2022062519/5697bfd71a28abf838cae9b7/html5/thumbnails/3.jpg)
The Government’s Role• In a free enterprise, capitalist system the government practices laissez-
faire economic policy, exercising minimal control over the economy• The government has 4 major roles in such a market economy
• Providing Public Goods• Dealing with Externalities• Maintaining Competition• Regulating Market Activities
![Page 4: Ch. 23 Government & the Economy Standard EE. How does the Govt help the needy??? What is: WIC Welfare Unemployment Social Security Income](https://reader036.vdocuments.us/reader036/viewer/2022062519/5697bfd71a28abf838cae9b7/html5/thumbnails/4.jpg)
Providing Public Goods
• Things that are too large, complicated, & costly to be done by private business or individuals• police force, fire department, military defense, roads
![Page 5: Ch. 23 Government & the Economy Standard EE. How does the Govt help the needy??? What is: WIC Welfare Unemployment Social Security Income](https://reader036.vdocuments.us/reader036/viewer/2022062519/5697bfd71a28abf838cae9b7/html5/thumbnails/5.jpg)
Dealing with Externalities
• Unintended consequences of economic decisions • Positive: good roads make products cheaper • Negative: pollution from companies could damage air and water
![Page 6: Ch. 23 Government & the Economy Standard EE. How does the Govt help the needy??? What is: WIC Welfare Unemployment Social Security Income](https://reader036.vdocuments.us/reader036/viewer/2022062519/5697bfd71a28abf838cae9b7/html5/thumbnails/6.jpg)
Maintaining Competition
• Anti-trust laws prevent the development of monopolies that can ruin the market system • Exemption: natural monopolies where it is cheaper & more efficient to have
one company provide the service• Power company, water service, etc.
![Page 7: Ch. 23 Government & the Economy Standard EE. How does the Govt help the needy??? What is: WIC Welfare Unemployment Social Security Income](https://reader036.vdocuments.us/reader036/viewer/2022062519/5697bfd71a28abf838cae9b7/html5/thumbnails/7.jpg)
Regulating Market Activities• Insure that businesses follow the law• Advertising laws to protect against false claims• Product labels to alert consumers what they are getting• Product safety requirements to insure the health/safety of consumers
![Page 8: Ch. 23 Government & the Economy Standard EE. How does the Govt help the needy??? What is: WIC Welfare Unemployment Social Security Income](https://reader036.vdocuments.us/reader036/viewer/2022062519/5697bfd71a28abf838cae9b7/html5/thumbnails/8.jpg)
Too Far?
![Page 9: Ch. 23 Government & the Economy Standard EE. How does the Govt help the needy??? What is: WIC Welfare Unemployment Social Security Income](https://reader036.vdocuments.us/reader036/viewer/2022062519/5697bfd71a28abf838cae9b7/html5/thumbnails/9.jpg)
Measuring Economic Growth• Gross Domestic Product (GDP): dollar value of all finished goods
produced by a country in a year• Allows comparison from year to year to determine economic growth• Allows comparison from country to country to compare economies
![Page 10: Ch. 23 Government & the Economy Standard EE. How does the Govt help the needy??? What is: WIC Welfare Unemployment Social Security Income](https://reader036.vdocuments.us/reader036/viewer/2022062519/5697bfd71a28abf838cae9b7/html5/thumbnails/10.jpg)
The Business Cycle• Helps economists map the Business Cycle • Pattern of expansion and recession as the economy grows over time
• Expansion – economic growth• Recession – 6 months of negative GDP growth (contraction)• Can result in high unemployment as businesses cut costs by laying-off workers• Extreme recession lasting for long period - Depression
![Page 11: Ch. 23 Government & the Economy Standard EE. How does the Govt help the needy??? What is: WIC Welfare Unemployment Social Security Income](https://reader036.vdocuments.us/reader036/viewer/2022062519/5697bfd71a28abf838cae9b7/html5/thumbnails/11.jpg)
Fiscal Policy• Fiscal = Budget• Fiscal Policy - Government use of taxing & spending to affect
economic growth (try to extend expansionary periods)
![Page 12: Ch. 23 Government & the Economy Standard EE. How does the Govt help the needy??? What is: WIC Welfare Unemployment Social Security Income](https://reader036.vdocuments.us/reader036/viewer/2022062519/5697bfd71a28abf838cae9b7/html5/thumbnails/12.jpg)
How Fiscal Policy Works• Government cuts taxes to increase economic growth• People pay less taxes = they have more money• Spending increases and companies have to expand to meet new demand• Hire new workers, which increases money in the economy (from new
paychecks)
![Page 13: Ch. 23 Government & the Economy Standard EE. How does the Govt help the needy??? What is: WIC Welfare Unemployment Social Security Income](https://reader036.vdocuments.us/reader036/viewer/2022062519/5697bfd71a28abf838cae9b7/html5/thumbnails/13.jpg)
How Fiscal Policy Works
• The government can bring about similar results by increasing spending• Companies hire new workers to complete government projects• New paychecks increase money in the economy, increasing demand
![Page 14: Ch. 23 Government & the Economy Standard EE. How does the Govt help the needy??? What is: WIC Welfare Unemployment Social Security Income](https://reader036.vdocuments.us/reader036/viewer/2022062519/5697bfd71a28abf838cae9b7/html5/thumbnails/14.jpg)
Problems with Fiscal Policy
• One danger of expansionary Fiscal Policy: Inflation – general rise in prices• Always happens, but too fast will affect consumer buying power & lead top
economic contraction