Why is the U.S. economy described as a 'mixed economy'?
Because it blends private enterprise with government intervention. The market is largely free, but the government steps in to regulate, provide services, and protect the public.
What is the purpose of government 'regulation' in the economy?
To set rules for businesses to follow. The goals are often to protect consumers, workers, and the environment from the potential negative effects of industrial activity.
Name a federal agency that regulates an aspect of the economy.
Examples include the Environmental Protection Agency (EPA), the Food and Drug Administration (FDA), or the Federal Aviation Administration (FAA).
What are 'public goods and services'?
Goods and services that are provided by the government because they are not likely to be provided by the private market. They are for the benefit of all citizens.
Provide an example of a public good or service.
National defense, public roads and highways, public schools, and police and fire departments.
How does the government pay for public goods and services?
Primarily through the collection of taxes from individuals and businesses.
What are 'antitrust laws'?
Laws designed to protect consumers from predatory business practices and ensure fair competition. They prevent the formation of monopolies and illegal cartels.
Which U.S. government institution is responsible for managing the nation's money supply?
The Federal Reserve System, often called "the Fed." It is the central bank of the United States.
What are two primary goals of the Federal Reserve (the Fed)?
To promote maximum employment and to maintain stable prices (i.e., control inflation). It also supervises the nation's banking system.
How does the government provide an economic 'safety net'?
Through programs like Social Security for the elderly, Medicare/Medicaid for healthcare, and unemployment insurance for those who have lost their jobs.
What is a 'subsidy'?
A payment or tax break from the government to a business or industry to help keep the price of a product or service low or competitive. Farming and energy are often subsidized.
What is the role of the Securities and Exchange Commission (SEC)?
To protect investors and maintain fair, orderly, and efficient markets. It regulates the stock market and enforces laws against market manipulation.
