United States Government
By: Jayne Anderson
1.How does the united states government promote and secure competition in a market economy?
- Competition in markets is an efficient way to designate goods and services while maintaining freedom of choice for consumers, workers, and entrepreneurs. If markets aren't competitive much of that freedom and efficiency can be lost. One threat to competition in the market is monopoly power. Monopoly power occurs when one producer, or a small group of producers, controls a large part of the production of some product. If there are no competitors in the market, a monopoly can artificially drive up the price for its goods. The U.S. government prevents these by strict rules and regulations, the earliest rule being set in 1890 with the Sherman Antitrust Act.
2.How does the U.S. government protect private property rights in a market economy?
The concept of private property refers to the rights owners have to the exclusive use and disposal of a physical object. Property is not a table, a chair, or an acre of land. It is the group of rights which the owner is entitled to. The United States government wrote a Bill of Rights to ensure protection of each individual's rights, including property rights.
3.How does the U.S. government promote equity in a market economy?
Different societies have different views of what is equitable, or equal. Fortunately for the United States and its citizens there are laws in each workplace to try and promote equality among men and women of all races and creeds. The movement for gender equality and equal opportunities is large right now and will continue to promote equity.
4.How do they provide public goods and services in a market economy?
Public goods are economic products that are consumed collectively, like highways, sanitation, schools, national defense, police and fire protection. Our society, depending on locality, has provided such public goods and services as public education, sanitation, police services, fire protection, libraries, infrastructure maintenance (roads, bridges, communications networks, etc..) and street lighting. Our government pays for these services with taxes.
5.How does the U.S. government resolve externalities and other market failures in a market economy?
Governments can intervene to make a market more efficient when a market failure occurs. An externality is any effect on people not involved in a particular transaction. Governments can intervene by taxing negative externalities or subsidizing positive externalities.
6.How does the U.S. government stabilize and promote growth in a market economy?
In order to restore stability, policymakers must focus on restoring the institutional role of governing. Government can provide a stable environment for economic growth when it can be depended on to maintain the stability of the currency, enforce and defend property rights, and provide oversight that assures private citizens that their transaction partners in the marketplace are held accountable.
7.How does the United States government use regulations and deregulation policies to affect consumers and producers in a market economy?
Deregulation refers to the deletion or relaxation of various laws and regulations that affect business and industry. The regulation of business and industry by government is for the purposes of consumer protection and or the enhancement of business competition. Regulation is generally thought to also protect minorities, employees, and the environment.