Maertens Economic Policy Lecture 9 - 25 - Economic Policy...

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Economic Policy Define Capitalism & Socialism Economic system Ideology affecting economic system Review Federal Budget Mandatory / Discretionary Spending Monetary Policy Fiscal Policy Tools used to affect economy
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Capitalism Economic System Privately owned; operated for profit Individual Rights Trade, incorporate, own land, use money, employ workers Free Market not State* Regulation Adam Smith “Wealth of Nations *The term “State” in this context refers to a nation Most Capitalist Economies are “Mixed” Economies Some gov’t intervention in economy Largest “Free” Economy in the World
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U.S.: A Capitalist Nation Constitution commerce clause, coin money, foreign trade Constitution silent on relationship between government and economy Constitution favorable to capitalism Protect property rights Emphasize individual liberties
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