the governments role in the free enterprise system
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The Governments role in the Free Enterprise System. LAISSEZ FAIRE. Initially, the US began with a policy toward business. This means: . LEAVE THINGS ALONE, HANDS OFF. CAPITALISM. This concept is often paired with , an economic system based on. - PowerPoint PPT PresentationTRANSCRIPT
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The Governments role in the Free Enterprise System
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Initially, the US began with a
policy toward business. This means: LAISSEZ FAIRE
LEAVE THINGS ALONE, HANDS OFF
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This concept is often paired with ,
an economic system based onCAPITALISM
PRIVATE OWNERSHIP OF THE FACTORS OF PRODUCTION.
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Why in theory is this supposed to work?
IT SHOULD WORK BECAUSE PRODUCERS WILL CREATE THE GOODS AND SERVICES THAT
CONSUMERS DEMAND.
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When did this change?
DURING INDUSTRIALIZATION
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Why?
https://beyond-english.wikispaces.com/file/view/rockefeller.JPG/39044570/rockefeller.JPG
BECAUSE ROBBER BARONS WERE CREATING MONOPOLIES AND BAD LABOR CONDITIONS
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What is different about this diagram compared to the one we drew on p. 8?
THE GOVERNMENT IS REPRESENTED ON THIS CIRCULAR FLOW CHART
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How does this new element interact with the circular flow model?
THE GOVERNMENT INTERACTS WITH BOTH THE FACTOR AND
PRODUCT MARKET AS WELL AS HOUSEHOLDS AND BUSINESSES
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PUBLIC SECTOR GOODS & SERVICES:
TOLLS, PARKS, SCHOOLS, USPS
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SOLE PROPRIETORSHIPS AND PARTNERSHIPS
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WHY DO YOU THINK MARY KAY ASH PROVED SO SUCCESSFUL IN HER COSMETICS VENTURE?
• BECAUSE–Entrepreneurial skills–Innovation in sales
techniques and incentives
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Sole ProprietorshipsAdvantages
• Easy to open and close
• Few regulations• Freedom and
control• Owner keeps Profit
Disadvantages• Limited funds• Limited life• Unlimited
liability
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Why are sole proprietorships the most common form of business organization in the US?
• Easy to start up• Full control• Relative freedom from regulation• Ability to leave the business at any time• All profits to the sole proprietor
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PartnershipsAdvantages
• Easy to open and close
• Few regulations• Access to resources• Joint Decision
Making• Specialization
Disadvantages• Potential for
conflict• Limited life• Unlimited
liability
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What do stocks and dividends have to do with corporations?
Stocks are sold to people (shareholders) and those shareholders receive a dividend or check at the end of the year containing a percentage of the corporations profits.
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CorporationsAdvantages
• Access to Resources
• Professional Managers
• Limited Liability• Unlimited Life
Disadvantages• Start-Up Cost
and Effort• Heavy Regulation
• Double Taxation• Loss of Control