SSEF5 The student will describe the roles of government in a market economy a Explain why government provides public goods and services redistributes income protects property rights and resolves market failures ID: 383376
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Slide1
Economic Functions of Government
SSEF5 The student will describe the roles of government in a market economy.
a. Explain why government provides public goods and services, redistributes income, protects property rights, and resolves market failures.
b. Give examples of government regulation and deregulation and their effects on consumers and producers. Slide2
Would you…?
If you have answered no to these questions, then you understand why we need government interaction in the economy.
If you answered yes…well…congrats! You’re a great human being.
Pay for some other child’s school?
Pay for somebody else’s bus ride?
Pay to clean a restroom at a park?
Pay to build a new road outside of your house? Slide3
Government’s Role
1) Provide a Legal System
2) Maintain Competition
3) Public Goods and Services4) Redistribute Income
5) Correct Market Failures
6) Stabilize the EconomySlide4
Provide a Legal System
Make and enforce laws to protect private property rights
Examples:
courts, monetary systemSlide5
Maintain Competition
Regulates monopolies
Examples
Anti-trust lawsSlide6
Public Goods and Services
Uses tax dollars to provide goods and services that private individuals wouldn’t provide
FREE RIDER PROBLEM- available to everyone, even those who don’t pay.
Examples:
Parks, national defense,
schoolsSlide7
Redistribute Income
Taxing large income groups to provide for those in need
Examples: social security,
medicare
,
medicaidSlide8
Resolve Market Failures
Corrects externalities
Positive externality- unintended benefit
Negative externality- unintended cost
Examples:
Environmental pollution, subsidies, educationSlide9
Stabilize the Economy
Reduces unemployment and inflation and promotes economic growth
Examples
Government budgets, monetary supplySlide10
Review
Get into groups of 2-3.
Illustrate two different examples of how the government intervenes in a market economy.
Be prepared to share your illustrations and explain them to the class.