American Free Enterprise Capitalism
What are resolving trade-offs among goals?
Goals sometimes conflict, achieving goals has opportunity costs, if trade-offs are political, people can vote on them, & the economic system of the USA is flexible enough to allow choices, accommodate compromises, and satisfy the majority of its citizens.
Price stability (economic & social goal)?
Have as little inflation as possible. Inflation discourages business activity.
Full employment (economic & social goal)?
Having as many job opportunities as possible.
What are the benefits of free enterprise capitalism?
Individual freedom, variety of goods, adopting change, promoting progress, and creation of wealth.
Economic efficiency (economic & social goal)?
Resources are scarce, wasted resources leads to fewer goods and services for people.
Growing gaps between the rich and poor?
Rich get richer and poor get poorer. Most Americans oppose social welfare programs that divert wealth from rich to poor.
Large "supply-side" tendencies?
Similar companies coming together to deter competition.
Economic security (economic & social goal)?
Americans desire protection from adverse economic events. State & national gov. has created compensation programs to help people.
What is a free enterprise?
An economy that has both capitalism and free market.
What are the 7 economic and social goals?
Economic freedom, economic efficiency, economic quality, economic security, full employment, price stability, and economic growth.
What are the 5 characteristics of free enterprise?
Economic freedom, voluntary exchange, private property, profit motive, and competition.
Competition?
Benefits both producers and consumers. Producers will always be producing newer, better, and less expensive products to market.
Rights and responsibilities of business?
Businesses have the same rights as consumers. Businesses have responsibility set by gov. to protect consumers.
What is capitalism?
Economic system in which private citizens own and use the factors of production to make products and generate profits.
Economic growth (economic & social goal)?
Economy has to grow to meet peoples increasing needs and a growing population.
Economic equality (economic & social goal)?
Equal pay for equal work. Minimum wage sets a floor for all income workers to earn.
Creation of wealth?
FE is the most efficient wealth generating system in the world.
Variety of goods?
Market economies have a huge variety of goods and almost all shapes, colors, and sizes when it comes to products.
Economic freedom (economic & social goal)?
People and businesses like to make their own choices. It's a cornerstone in American society.
Profit motive?
People are free to risk any part of their wealth in hopes of profit. Profit motive is the number one reason for the growth of free enterprise economy.
Private property?
People can own and control their possessions, you can use your own property as long as it doesn't interfere with the rights of others, and gives people the incentive to work, save, and invest.
Promoting progress?
Producers are competing for consumers money. Producers are forced to innovate their products.
What is a free market?
Products are bought and sold in markets without government regulation or interference.
Uneven economic growth?
Some times growth is slow or takes a step back.
Adopting to change?
The economy can adjust quickly.
Economic freedom?
The freedom to choose occupation, your employer, job location, etc. Businesses can hire whoever they want, produce what they want, how much to produce, and price.
What are the disadvantages of free enterprise capitalism?
Uneven economic growth, growing gaps between rich and poor, large "supply-side" tendencies, and rights and responsibilities of business.
Voluntary exchange?
Voluntary act of buyers and sellers freely and willingly engaging in market transactions.
Individual freedom?
We make choices in the market and voting booths. Individual freedom and economic freedom tend to go hand and hand.
