2.04 U.S. Economy
Objective 2.04 Understand the
United States’ economic system.
Mixed Economy


A combination of a
free enterprise (or
market) and a
command
economy.
Privately owned
businesses and
government both
play important
roles.


The marketplace
produces:
 cars
 health care
 technology
 food (with some
government
regulations)
The government
provides:
 defense
 education
United States’
Mixed Economy
Free Enterprise/Market Economy
Market Economy
Characteristics
Private property
ownership.
 Freedom of
enterprise and
Choice
 Motive of selfinterest

Competition
 System of
markets and
prices
 The market
addresses
consumer wants
Market Economy
Advantages
Individuals can own businesses and
resources
 Individuals can buy and sell goods and
services
 Competition in the market leads to
greater choices
 Consumers play a great role in the
economy

Market economy
Disadvantage

The critical role of the consumer
in the market can create a
tremendous divide between the
poor and the wealthy
United States’
Mixed Economy
Command Economy
Limited Government

The government helps protect
people by being a body that
monitors public safety through
regulatory agencies such as:
Food & Drug Administration (FDA)
 Occupational Safety and Health
Administration (OSHA)

The government provides some
services to take care of people’s
needs
Highways--roads
and other
transportation
services
 Schools and other
public education
services

Social Security
 Medicare
 Defense and
public safety

Command Economy
 Advantages
 Consumers
have some
protection in the marketplace
 Essential services are provided
for citizens
Command Economy
 Disadvantages
 Citizens
have to pay taxes so
the government can provide
services
 Some think there is too much
government control in the
marketplace
United States’ Economy Summary
Largest national
economy in the
world
 A mixed economy
 Corporations and
other private firms
make the majority
of microeconomic
decisions.

Government has a
minimal role in the
domestic economy.
 Business firms in
the U.S. have much
less regulation than
those in many
other nations.
