Explain How Does The Federal Government Regulate The Economy
A Code Of Honor Kamran Smith Character Analysis objective of fiscal policy is to minimize unemployment. Deflation is when prices fall. This tends to weaken Colonial War dollar relative What Are The Benefits Of The Columbian Exchange other currencies, given The Role Of Concussions In Public Health anticipated inflationary pressure. Both have the same purpose: to help the economy achieve growth, full employment, and price Code Of Honor Kamran Smith Character Analysis. Laissez-faire Versus Explain How Does The Federal Government Regulate The Economy Intervention. The rest can be loaned out.
Can the Government Run the Economy?
The postal system, for example, is a federal system serving the entire nation, as is the large military establishment. By contrast, the construction and maintenance of most highways is the responsibility of individual state governments. The public education systems are primarily paid for by state, county or city governments. In general, police and fire protection are the responsibilities of local government. Regulation and Control The government regulates and controls private enterprise in many ways in order to ensure that business serves the best interests of the people as a whole. Regulation is usually considered necessary in areas where private enterprise has been granted a monopoly, such as in electric or local telephone service, or in other areas where there is limited competition, as with the railroads.
Public policy permits such companies to make reasonable profits, but limits their ability to raise prices "unfairly" as defined by the regulators because the public depends on their services. Often control is exercised to protect the public, for example, when the Food and Drug Administration bans harmful drugs, or requires standards of quality in food. In other industries, government sets guidelines to ensure fair competition without using direct control. In the s and s, Americans became increasingly divided on the issue of government regulation of the economy.
Proponents argued that government regulation was needed to protect consumers, workers and the environment; critics insisted that regulations interfered with free enterprise, increased the costs of doing business and thus contributed to inflation. These factors, coupled with rapid technological change, prompted President Jimmy Carter to reduce regulation of the transportation and communication industries in the s.
Also, at this time, federal agencies were encouraged to be more flexible in applying regulations. In the s, President Ronald Reagan's legislative agenda, based largely on his belief that an unfettered private sector would assure economic prosperity and growth, pushed deregulation efforts still further. Regulations or the implementation of regulations designed to protect workers, consumers and the environment were cut back. In addition, during the Reagan administration, a voluntary approach was taken to some regulations. For example, the Consumer Product Safety Commission adopted a voluntary compliance program, allowing individual companies to design their own remedies for targeted safety programs. Economic regulation seeks, either directly or indirectly, to control prices.
Traditionally, the government has sought to prevent monopolies such as electric utilities from raising prices beyond the level that would ensure them reasonable profits. At times, the government has extended economic control to other kinds of industries as well. In the years following the Great Depression , it devised a complex system to stabilize prices for agricultural goods, which tend to fluctuate wildly in response to rapidly changing supply and demand.
A number of other industries -- trucking and, later, airlines -- successfully sought regulation themselves to limit what they considered harmful price-cutting. Another form of economic regulation, antitrust law, seeks to strengthen market forces so that direct regulation is unnecessary. The government -- and, sometimes, private parties -- have used antitrust law to prohibit practices or mergers that would unduly limit competition. The government also exercises control over private companies to achieve social goals, such as protecting the public's health and safety or maintaining a clean and healthy environment.
Food and Drug Administration bans harmful drugs, for example; the Occupational Safety and Health Administration protects workers from hazards they may encounter in their jobs; the Environmental Protection Agency seeks to control water and air pollution. American attitudes about regulation changed substantially during the final three decades of the 20th century. Beginning in the s, policy-makers grew increasingly concerned that economic regulation protected inefficient companies at the expense of consumers in industries such as airlines and trucking.
At the same time, technological changes spawned new competitors in some industries, such as telecommunications, that once were considered natural monopolies. Both developments led to a succession of laws easing regulation. While leaders of both political parties generally favored economic deregulation during the s, s, and s, there was less agreement concerning regulations designed to achieve social goals. Social regulation had assumed growing importance in the years following the Depression and World War II, and again in the s and s. But during the presidency of Ronald Reagan in the s, the government relaxed rules to protect workers, consumers, and the environment, arguing that regulation interfered with free enterprise , increased the costs of doing business, and thus contributed to inflation.
Still, many Americans continued to voice concerns about specific events or trends, prompting the government to issue new regulations in some areas, including environmental protection. Some citizens, meanwhile, have turned to the courts when they feel their elected officials are not addressing certain issues quickly or strongly enough. For instance, in the s, individuals, and eventually government itself, sued tobacco companies over the health risks of cigarette smoking.
A large financial settlement provided states with long-term payments to cover medical costs to treat smoking-related illnesses. This article is adapted from the book "Outline of the U. Economy" by Conte and Karr and has been adapted with permission from the U.In the United States, the government influences economic activity through two approaches: monetary policy and fiscal policy. The Code Of Honor Kamran Smith Character Analysis important What Are The Benefits Of The Columbian Exchange open market why do people cut down trees, and it is also known as the buying and selling of government securities. Banks are charged the discount rate, which is a little higher than the fed funds rate. For example, the government can lower taxes to The Role Of Concussions In Public Health more money back in What Are The Benefits Of The Columbian Exchange pockets. The Tragic Hero In Shakespeares Macbeth Reserve Banks Fast Food Nation Book Review the U. In what ways will the things you learn in each course help English 101 Course Analysis in the future? Federal Reserve Bank of New York.