low soo peng america economy

7/29/2019 Low Soo Peng America Economy

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The role of government in

the United States economyHow does the United States

government promote and regulatecompetition?


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Role of Government

The governmentpromotes and regulatescompetition.

Ways the governmentpromotes marketplacecompetition

Enforcing antitrustlegislation to discouragethe development ofmonopolies

Engaging in global trade

Supporting businessstart-ups


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Role of Government

Government agenciesthat regulate business

FCC (FederalCommunicationsCommission)

EPA(EnvironmentalProtection Agency)

FTC (Federal TradeCommission)

These agencies overseethe way individuals andcompanies do business


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Role of Government

Government provides public goods andservices that individuals acting alone couldnot provide efficiently.

Things like roads and transportation, andeducation are services that thegovernment helps to fund. It would be

too expensive for private business toprovide these services to the public.


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Role of Government

What are publicgoods and services?

Include such items asinterstate highways,postal service, and

national defense Provide benefits to

many simultaneously

Would not beavailable if individualshad to provide them


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Role of Government

How do governmentsproduce public goodsand services?

Through tax revenue

Through borrowedfunds


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Role of Government

What is the impact oftaxation on the typeof things that

government canprovide to thepeople?

Government taxincreases reduce thefunds available for

private and businessspending; taxdecreases increasefunds for private and

business spending.


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Role of the Government

How does the money thatthe government borrowsaffect economic activity?

Increased governmentborrowing reduces fundsavailable for borrowing byindividuals and

businesses; decreasedgovernment borrowingincreases funds availablefor borrowing by

individuals andbusinesses.


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How does governmentspending affect economicactivity?

Increased governmentspending increasesdemand, which mayincrease employment andproduction; decreased

spending reducesdemand, which mayresult in a slowing of theeconomy.

Increased government

spending may result inhigher taxes; decreasedgovernment spendingmay result in lower taxes.


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What is the 16thAmendment to theConstitution, and why is itimportant?

The 16th Amendment tothe Constitution of theUnited States of Americaauthorizes Congress to

tax incomes (personaland business).

This provided moremoney for thegovernment to fund the

projects that it needed topay for so that the U.S.economy could grow.


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How does the FederalReserve Systemregulates the moneysupply ?

The Federal ReserveSystem (Fed) is thecentral bank of theUnited States.

Federal Reservebanks act as abankers bank byissuing currency andregulating the amountof money incirculation.


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The Federal ReserveSystem, acting as thecentral bank,regulates the moneysupply.

To slow the economy,the Federal ReserveBank restricts themoney supply,causing interest ratesto rise; to stimulatethe economy the Fedincreases the money

supply, causinginterest rates todecline.


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What is the role ofthe Federal ReserveSystem in maintaining

a stable economy?

Ways the FederalReserve Bankslows the economy

Increases the reserverequirement

Raises the discountrate

Sells governmentsecurities


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What is the role ofthe Federal ReserveSystem in maintaininga stable economy?

Ways the FederalReserve Bankstimulates theeconomy

Lowers the reserverequirement

Lowers the discount

rate Purchases

government securities


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What is the role ofthe United Statesgovernment in

protecting consumerrights and propertyrights?

The United Statesgovernment passeslaws and creates

agencies to protectconsumer rights andproperty rights.


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What is the role of theUnited States governmentin protecting consumerrights and property

rights?

Individuals have the rightof private ownership,which is protected bynegotiated contracts that

are enforceable by law. Government agencies

establish guidelines thatprotect public health andsafety.

Consumers may takelegal action againstviolations of consumerrights.

low soo peng america economy

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