Blog #4

1. How are the economic goals of freedom, security, efficiency, equity, stability, and economic growth achieved in a market economy? Freedom is the freedom of the marketplace; security is enhanced by individual efforts, such as saving and the purchase of insurance, as well as by the growth of the economy; efficiency possesses productive efficiency in producing goods; equity can be described as the application of our concepts of what is fair and what is unfair; stability is absence of inflation or deflation, not the absence of changes in relative prices in particular markets; economic growth producing increasing amounts of goods and services over the long term.



2. Why has the role of government in the economy increased dramatically since the 1880s? During the 19th century, governments played a central and pervasive role both in establishing the economic and institutional conditions necessary for the occurrence of the Industrial Revolution and for promoting its spread to the follower European nations. Everywhere, governments reduced the risks of private transactions by promulgating laws that limited entrepreneurial liability, increasing the security of property rights, and enforcing private contracts.

3. Write an argument that supports or opposes the statement in the visual below that says, "deregulation won't work because people are greedy”?  I believe that the deregulation wont work, because the whole purpose of starting a business is to make money. Its very little people who can say they have enough money, because you can never have enough money. And without the regulation prices will be through the roof and the workers will be mistreated an it wouldnt benefit the consumers or owner.

4. Explain why the government provides public goods and services. Why are these public goods and services NOT provided by the private sector? (Please include a discussion on non-rivalries and non-excludable goods) The government provides public good and services because they have to be non-rivalrous and non- excludable so that everyone can have access to these goods. If private sectors provided these goods, they would not be non-rivalrous and non-excludable.

5. What are the 6 functions of government in a market economy (provide an example of how the government fulfills each of these 6 functions)? The six functions of government in a market economy are freedom, security, efficiency, stability, equity, and economic growth. Freedom is achieved by the people having the freedom to work (or not), freedom to produce, trade and consume any goods and services acquired without the use of force, fraud or theft. Security is achieved by having stable income or other resources to support a standard of living now and in the foreseen future. Efficiency is achieved by production proceeding at the lowest possible per-unit cost. Stability is achieved by the absence of excessive fluctuations in the economy, an example is high employment. Economic growth is achieved when a nation’s wealth increases over time.

6. Describe the relationship that inputs and outputs have on productivity? The input is adding more capital to a business to increase the workers productivity, which will improve the business output. In additional to that also increase the company's profit.

7. How do investments in capital goods, technology, human capital, training, and educating workers, improve productivity and economic growth? You invest into capital goods, technology, human capital, training, and educating workers that improves productivity because smarter workers find ways to complete more work in less time. Human capital and technology increases productivity because they aid the workers so that more work can be completed.

8. Refer to the chart below and explain the cause of the decrease in the output, productivity, and employment in manufacturing in the United States. What can the United States do to reverse this downward trend in manufacturing? Deregulations has more ups than downs. In this chart, the effect of not having the government involved is exemplified.

Reflection: What are two questions that you still have about these particular standards? What way would market economy be useful? How do inputs and outputs show scarcity?