Government and the Economy

1. Government and the Economy

2. Since the United States is a mixed economy, the U.S. government has a big role in monitoring and regulating business and money in the U.S. Here are some important ways that the government helps to regulate the economy:

3. 1) The government protects and supports free competition in a free market by • Enforcing antitrust legislation(these are laws that prevent any one company from controlling the marketplace); • Supporting business start-ups (the government helps new businesses get going with money and tax breaks);

4. Discouraging the development ofmonopolies (monopolies occur when one company controls an entire industry--the government tries to prevent this); • Engaging in global trade (by trading with other countries, the U.S. can increase free trade within the U.S.)

5. 2) The government regulates business through the • FCC (Federal Communications Commission) which oversees TV and radio programming • EPA (Environmental Protection Agency) which monitors and controls how much businesses pollute the environment during manufacturing • FTC (Federal Trade Commission) which governs the way businesses deal with each other and the government and protects against false advertising

6. 3) The government provides public goods and services with tax money and borrowed money like • Interstate highways • The postal service • National defense

7. 4) The government protects consumers’ buying and property rights by having • Contracts that can be enforced by law and by protecting private property rights • Government agencies that protect public health and safety (like the Center for Disease Control (CDC) and the Consumer Product Safety Commission) • Laws that protect consumer rights