Chapter 16 Summary - Chapter 16: Government and the Economy...

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Unformatted text preview: Chapter 16: Government and the Economy The Goals of Economic Policy Public policy: a law, rule, statute, or edict that expresses the governments goals and provides for rewards and punishments to promote their attainment Government makes it possible for the economy to function efficiently by setting the rules for economic exchange and punishing those who violate those rules Define property rights, contracts, and standards for goods; allows for expansion of market Promoting Stable Markets o Protect the welfare and property of individuals and markets o Government actions must constantly be updated and adapted to meet new conditions o Maintenance of law and order is very important Laws enacted to protect economic transactions Racketeering laws aim to end criminal efforts to control businesses through such illegal means as extortion and kickbacks o Regulating competition Consistency throughout the states was important Could reduce prices and make industry more responsive to consumers o Public goods: a good or service that is provided by the government because it either is not supplied by the market or is not supplied in sufficient quantities Transportation systems, electricity, water, public security Promoting Economic Prosperity o Can be traced back to Hamilton promoting industry o Measuring Economic Growth Gross National Product: market value of the goods and services produced in the economy Gross Domestic Product: the total value of goods and services produced within a country Past centuries growth due to natural resources, manufacturing industries, Promoting business, investor, and consumer confidence Securities and Exchange Commission: requires companies to disclose information about the stocks and bonds they are selling, inform buyers of the investment risks, and protect investors against fraud Helps to maintain investor confidences and a strong supply of capital for American business Public investment promotes growth as a byproduct of other more central objectives, such as military spending Innovation National Science Foundation: supports basic research across a range of scientific fields to advance fundamental knowledge that may be used in different applications National Institutes of Health: conduct basic and applied research in biomedicine, recently bioterrorism and vaccines Human Genome Project: effort to map the basic genetic structure of human life, initiated by govt researchers and then by private corporations Military research Sufficient, productive and educated workforce Federal immigration policy ensures adequate supply of labor, priority given to those with special skills Education responsibility of government: educational grants, tax breaks loans, job-training programs for low-skilled workers o Full Employment After Great Depression, government was expected to solve unemployment (New Deal, Works Progress Administration) Applied Keynes theories that government could boost...
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This note was uploaded on 04/06/2011 for the course KIN 354 taught by Professor Robinson during the Fall '09 term at University of Texas at Austin.

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Chapter 16 Summary - Chapter 16: Government and the Economy...

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