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The Governments role in the Free Enterprise System

The Governments role in the Free Enterprise System. LAISSEZ FAIRE. Initially, the US began with a policy toward business. This means: . LEAVE THINGS ALONE, HANDS OFF. CAPITALISM. This concept is often paired with , an economic system based on.

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The Governments role in the Free Enterprise System

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  1. The Governments role in the Free Enterprise System

  2. LAISSEZ FAIRE Initially, the US began with a policy toward business. This means: LEAVE THINGS ALONE, HANDS OFF

  3. CAPITALISM This concept is often paired with , an economic system based on PRIVATE OWNERSHIP OF THE FACTORS OF PRODUCTION.

  4. Why in theory is this supposed to work? IT SHOULD WORK BECAUSE PRODUCERS WILL CREATE THE GOODS AND SERVICES THAT CONSUMERS DEMAND.

  5. DURING INDUSTRIALIZATION When did this change?

  6. BECAUSE ROBBER BARONS WERE CREATING MONOPOLIES AND BAD LABOR CONDITIONS Why? https://beyond-english.wikispaces.com/file/view/rockefeller.JPG/39044570/rockefeller.JPG

  7. THE GOVERNMENT IS REPRESENTED ON THIS CIRCULAR FLOW CHART What is different about this diagram compared to the one we drew on p. 8?

  8. How does this new element interact with the circular flow model? THE GOVERNMENT INTERACTS WITH BOTH THE FACTOR AND PRODUCT MARKET AS WELL AS HOUSEHOLDS AND BUSINESSES

  9. PUBLIC SECTOR GOODS & SERVICES: TOLLS, PARKS, SCHOOLS, USPS

  10. SOLE PROPRIETORSHIPS AND PARTNERSHIPS

  11. WHY DO YOU THINK MARY KAY ASH PROVED SO SUCCESSFUL IN HER COSMETICS VENTURE? • BECAUSE • Entrepreneurial skills • Innovation in sales techniques and incentives

  12. Sole Proprietorships Advantages Disadvantages Limited funds Limited life Unlimited liability • Easy to open and close • Few regulations • Freedom and control • Owner keeps Profit

  13. Why are sole proprietorships the most common form of business organization in the US? • Easy to start up • Full control • Relative freedom from regulation • Ability to leave the business at any time • All profits to the sole proprietor

  14. Partnerships Advantages Disadvantages Potential for conflict Limited life Unlimited liability • Easy to open and close • Few regulations • Access to resources • Joint Decision Making • Specialization

  15. What do stocks and dividends have to do with corporations? Stocks are sold to people (shareholders) and those shareholders receive a dividend or check at the end of the year containing a percentage of the corporations profits.

  16. Corporations Advantages Disadvantages Start-Up Cost and Effort Heavy Regulation Double Taxation Loss of Control • Access to Resources • Professional Managers • Limited Liability • Unlimited Life

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