Comparative Economic Systems 2.1. kduncan.wikispaces.com.
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Transcript of Comparative Economic Systems 2.1. kduncan.wikispaces.com.
‘We make good the difference in 10 years or they crush us’.
1927 1933 1937
Electricity ('000 million kw)
5 13 36
Coal (million tons)
35 64 128
Oil (million tons)
12 21 47
Steel (million tons)
4 6 18
Economic and Social Goals of the US
• Economic Freedom
• Economic Efficiency
• Economic Equity
• Economic Security
• Full Employment
• Price Stability
• Economic Growth
Equity• Justice, impartiality, fairness• For employment, it is illegal to discriminate on the
basis of age, sex, race, religion, or disability.
Security• Protection from adverse economic events:
– Unemployment, layoffs, illnesses, disability, old age
• Social Security – federal program of disability and retirement benefits that covers most working people
TRADE-OFFS AMONG GOALS• Full-employment vs. individual freedom
– Policy that keeps foreign-made shoes out
• Economic growth vs. stability y security– A new shopping center built near a highway
•Could help stimulate economic growth in one area of a community while threatening merchants who run stores in a downtown area
• Equity vs. freedom– Minimum wage
Price Stability• Stable prices• Inflation – a rise in the general level of prices
– Hurts people with fixed incomes – an income that does not increase even though prices go up
• The federal reserve increases interest rates to discourage businesses from borrowing and spending
INFLATION• What is a dollar worth?
http://woodrow.mpls.frb.fed.us/research/data/us/calc/
• Consumer Price Index, 1913-present – http://www.minneapolisfed.org/community_education/
teacher/calc/hist1913.cfm
• Not Everything is More Expensive– http://www.nytimes.com/imagepages/2008/05/07/
business/20080507_LEONHARDT_GRAPHIC.html
• WHY???
• Let’s look @ the wiki!