The Role of Government in Our Economy

Transcription

1 Chapter 11 The Role of Government in Our Economy Section 11.1 Government as Regulator Click here to advance to the next slide. Read to Learn Name four ways in which government regulates business. The Main Idea Our government s role is to foster success in the economy. One way it does that is by creating rules and regulations that organizations and consumers must follow. Laws cover three aspects of the economy. They protect competition. They protect business agreements and creative properties. They are also used to regulate the production process. Key Concept How the Government Regulates Business interstate commerce business that takes place between states intrastate commerce business that takes place within states 1

2 monopoly when a company controls an industry or is the only one to offer a product or service trust a group of companies that band together to form a monopoly and cut out competition oligopoly when a small number of companies control an industry antitrust laws laws that allow the federal government to break up monopolies, regulate them, or take control of them a legally enforceable agreement between two or more parties copyright the legal right of artists to own their creations breach of when one party fails to live up to the terms of a patent a legal grant for the sole right to own an invention trademark a name, a symbol, or a characteristic that identifies a product How Government Regulates Business The government is responsible for fostering economic success and protecting people by regulating businesses. 2

3 Graphic Organizer How Government Regulates Business Federal Government Three Levels of Government State Government Local Government The federal government oversees interstate commerce. interstate commerce business that takes place between states Country State Counties Townships Cities Towns How Government Regulates Business Protecting Competition The state government oversees intrastate commerce. intrastate commerce business that takes place within states When a monopoly or an oligopoly occurs, consumer choice is limited. monopoly when a company controls an industry or is he only one to offer a product or service oligopoly when a small number of companies control an industry Protecting Competition Monopoly, the Board Game Lizzie Magie, a young Quaker woman from Virginia, created a game that became Monopoly in It was developed as a way to teach people about the monopoly of land ownership. Companies can form a monopoly by establishing a trust. trust a group of companies that band together to form a monopoly and cut out competition 3

4 Protecting Competition Protecting Business Agreements The U.S. government formed the Federal Trade Commission (FTC) to enforce antitrust laws and regulate interstate trade. antitrust laws laws that allow the federal government to break up monopolies A can be written, verbal, or formed over a handshake. a legally enforceable agreement between two or more parties Protecting Business Agreements Protecting Creative Properties It is easier to prove a breach of occurred if there is a written. breach of when one party fails to live up to the terms of a A person creating an original work automatically holds the copyright to it, which lasts until 70 years after the owner s death. copyright the legal right of artists to own their creations Protecting Creative Properties Protecting Creative Properties A patent lasts for 20 years after the inventor filed his or her application with the U.S. Patent and Trademark Office. patent a legal grant for the sole right to own an invention A trademark is protected from being copied if it is registered appropriately. trademark a name, symbol, or characteristic that identifies a product 4

5 Regulating the Production Process The government regulates the production process by passing laws that protect the environment and workers. Regulating the Production Process The Food and Drug Administration (FDA) regulates the manufacture and sale of drugs in the United States. You own a clothing shop in a state that has a low sales tax; neighboring states have a higher sales tax. When an out-of-state customer buys clothing at your shop, you do not add any tax. Many out-ofstaters shop at your store and you do not know if they pay the tax they are supposed to pay. Decision Making Is it appropriate for you to advertise your shop in nearby out-of state towns? Explain your answer. Answer Students might suggest that it is not appropriate to appear to be promoting tax avoidance. However, advertising your shop s goods and services is appropriate, even if the area encompasses more than one state. 1. What is the difference between interstate and intrastate commerce? Interstate commerce is business between states, overseen by the federal government. Intrastate commerce is business within a state, overseen by state or local governments. 2. What are the ways that the government can deal with a monopoly? It can break it up, regulate it, or take it over. 5

6 3. What kinds of property are protected by copyrights? musical compositions, song lyrics, books, movies, plays, and photographs End of Chapter 11 The Role of Government in Our Economy Section 11.1 Government as Regulator 6