Economic Goals; Role of Government; Economic Growth and Productivity

1. How are the economic goals of freedom, security, efficiency, equity, stability, and economic growth achieved in a market economy?

In a market, economic freedom is the freedom to work (or not), freedom to produce, trade and consume any goods and services acquired without the force, fraud or theft.

In a market, economic security is the condition of having stable income or other resources to support a standard of living now and in the foreseeable future. It includes probable continued solvency (assests exceed liabilities), predictability of the future cash flow of a person or other economic entity, such as a country, and employment security or job security.

In a market, economic efficiency is said to be more efficient than another if it can provide more goods and services for society without using more resources.

In a market, economic equtity refers to what is fair. Generally, the apportionment (distribution) of resources or goods among the people is considered fair.

In a market, economic stability is the absence of excessive fluctuations in the economy. Ex. high unemployment.

In a market, economic growth is the process by which a nation's wealth increases over time. The most widely used measure of economic growth is GDP, the country's total output of goods and services.

2. Why has the role of government in the economy increased dramatically since the 1880s? The government had to maintain social and legal framework. Providing public goods and services, maintain competition, redistribute income, correcting for externalities, and stabilize the economy.



3. Write an arguement that supports or opposes the statement in the visual below that says "deregulation won't work because people are greedy"? Deregulation is the removal of some government controls over a market. If the government isn't in conrol the people will take advantage and have more freedom to do what they want to do which is a bad idea.

4. Explain why the government provides public goods and services? Why are these public goods and services NOT provided by the private sector? (please include a discussion on non-rivalrous and non-excludable goods) The government provides public good and services because they have to be non-rivalrous and non- excludable so that everyone can have access to these goods. If private sectors provided these goods, they would not be non-rivalrous and non-excludable.

5. What are the 6 functions of government in a market economy (provide an example of how the government fulfills each of these 6 functions)? 1. Maintaining Legal and Social Framework (Ex. Create laws and provide courts, provide info. and services to help economy function better, establish a monetary system, define and enforce property rights.) 2. Providing Public Goods and Services (Ex. Provide goods and services that markets are unable or unwilling to provide, such as national defense.) 3. Maintaining Competition and Protecting Profits (Ex. Create and enforce antitrust laws; regulate natural monopolies.) 4. Redistributing Income (Ex. Higher income tax rates for rich than for poor, provide social security, and aid to dependent children, medicare, medicaid.) 5. Correcting for Externalities (Ex. Taxes to reduce negative externalities, such as education. Externalaties exist when some of the costs or benefits associated with the production or consumption of a product "spill over" to third parties other than the direct producer or consumer of the product.) 6. Stabilizing the Economy (Ex. Use government budgets and/or the money supply to promote economic growth, control inflation, and reduce unemployment.)

6. Describe the relationship that inputs and outputs have on productivity? The input is hard work a worker put in to get a good outcome which is the output. The work that is done will improve the business output.

7.  How do investments in capital goods, technology, human capital, training, and educating workers, improve productivity and economic growth? You invest into capital goods, technology, human capital, training, and educating workers that improves productivity because smarter workers find ways to complete more work in less time. Human capital and technology increases productivity because they aid the workers so that more work can be completed.

8. Refer to the chart below and explain the cause of the decrease in the output, productivity, and employment in manufacturing in the United States. What can the United States do to reverse this downward trend in manufacturing? Deregulations has more ups than downs. In this chart, because people are being greedy. The effect of not having the government involved is exemplified.

Reflection: What are two questions that you still have about these particular standards? What way would market economy be useful? How do inputs and outputs show scarcity?

 

1. Why was this assignment so confusing?

2. Does Deregulation have anything to do with the government?

 

Market economy is useful because economic decisions and the pricing of goods and services are guided solely by the aggregate interactions of a country's citizens and businesses and there is little government intervention or central planning.

 

Inputs and Outputs show scarcity because if the input isn't good enough in a business the output will be bad causing the business to loose money which will cause scarcity. The business will go bad!