The U.S. Free-Enterprise Economy Essay

The U.S. Free-Enterprise Economy Essay

Length: 788 words (2.3 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

The United States is known for having a free-enterprise economy where a business can be conducted freely without government involved. In free-enterprise economies, goods and services are traded openly and are produced depending on the demand. People who support this type of economy believe it motivates businesses to make money and welcome new ideas. An important part of the economy is to have full employment and low inflation.
Keynesianism and monetarism are both ways to stabilize the economy and promote growth when need. In keynesianism, government uses fiscal policy which is a list of policies that government spending and taxing can be used to improve the performance of an economy. The government produces stabilization by taxing and spending yearly plans. Taxing can occur when inflation is high and lowering taxes tends to occur during a high percentage of unemployment. By lowering taxes, it increases disposable income or the party of income that goes to financial responsibilities. When people have more money, they are able to spend more which in return goes into jump starting the economy. Monetary Policy is another policy used in Keynesianism which is a list of protocol designed to regulate the economy by setting the amount of money that is in circulation and controlled interest levels. The Federal Reserve system also known as the central banking system in the U.S. which holds control of this policy. Monetary policy has three tools used my the Federal Reserve to enforce this policy. Reserve Requirement is the first tool that determines the lowest amount of money a bank must possess and is not able to lend out. The second way to enforce monetary policy is by using the discount rate or the interest rank a bank will charge. The f...

... middle of paper ...

...hey are can cause national debt. This would lead to other countries to lose faith in the dollar resulting in loss or trade and investors. The dollar will be worth less and less if nation is in high debt. People will also be affected, when you have less money you spend and buy less due to increased prices which can causes problems in the economy such as a recession or worse a depression. Budget Deficit calls for the government to let cost exceed national income and use of monetary policy to jump start the economy. The government must be careful when choosing the best way to build the economy up. If the policies fail, they can lead the nation into many problems as stated above. This is why regulating money, trade, and the economy is an important part in government tasks. In the end, citizens want the best policy to promote the U.S. into a stabile and secure economy.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

World War I Results in Liberty and Free Enterprise in America Essay

- Throughout the 1920’s,traditional American values such as liberty and free enterprise became significantly more present in certain groups of society as a result of World War 1. The traditional American value of liberty was significantly present in the group of rich industrialists, which was led by Henry Ford in the 1920’s. In the 1920’s rich industrialists were greatly benefited by free enterprise policies of the republican government. As described by Fiehn on page 27 the policies of the Republican government greatly benefited the rich industrialists of the 1920’s by ‘lowering taxes on income and company profits, putting tariffs on imported goods....   [tags: values, economy, business]

Better Essays
743 words (2.1 pages)

Essay On Free Trade

- The commercial activity has been, over the centuries, linked to human activity, due to the need to obtain satisfactory. The evolution of trade throughout history presents issues of immense importance to understand the current configuration of trade, However, for the purposes of this research we will be observing what is free trade so we can understand and interpret every point that we will be talking about in this investigation. Free Trade is an economic concept, referring to the sale of products between countries, duty-free and any form of trade barriers....   [tags: International trade, Economics, Free trade, Tariff]

Better Essays
829 words (2.4 pages)

Economy Is An Economic System Essay examples

- 2 My understanding of a market economy is where decisions are based on supply and demand, in regards to any investment, any production, and distribution of funds; it is where the prices of goods and services are determined. The activity in a market economy is unplanned; it is not organized by any central authority and is determined by the supply and demand of goods and services. Alternatively, a command economy is organized by government officials who also own and direct the factors of production....   [tags: Capitalism, Economics, Free market]

Better Essays
1509 words (4.3 pages)

The Benefits of Private Enterprise Essay example

- Private enterprise is the ironclad foundation of the United States of America. Whenever this right is jeopardized, the stability of the country follows in a symmetric trend. However, the value of this system has not always been clear. Throughout time no country has embraced this system quite like the United States. Private enterprise entails the right to market and sell a product or service, as well as the right of purchase. Indeed the consumer, in his participation, is a private enterpriser (Lubell)....   [tags: Market, Product, Service, Economy]

Better Essays
1154 words (3.3 pages)

The Promising Future of China's Economy Essay

- The Promising Future of China's Economy If China's economy grows as fast for the next 20 years as it has for the past 14, it will be the biggest economy on earth: I feel that China's drastic improvements over the last 14 years are overwhelming, with their Real GNP growing at a rate of 9% a year, which means by, 1994, China's economy will match the performance of countries like Japan and Taiwan. China's standard of living has also increased, and the number of people who were considered absolutely poor decreased approximately 63%....   [tags: Economy]

Better Essays
969 words (2.8 pages)

Essay about Nepal : Developing Country With An Agricultural Economy

- Nepal is a landlocked country located in south Asia between China and India. Nepal is a developing country with an agricultural economy. In recent years, the nation’s effort to expand into technological and manufacturing sector have achieved progress. Farming is the key economic activity followed by trade, manufacturing and tourism. The major source of foreign currency earning is export, remittance, service and tourism. Merriam Webster dictionary defines business as: The activity of making, buying, or selling goods or providing services in exchange for money; work that is part of a job; the amount of activity that is done by a store, company, factory, etc....   [tags: Investment, Economics, Economy, Macroeconomics]

Better Essays
1029 words (2.9 pages)

Political Economy Essay

- The UK economy has undergone structural, financial, and political change over the last thirty years. Different ideologies and policies have served to shape the relationship between government and economy in varying directions. Some elements, such as state intervention, have remained as a point of debate. Other factors, like globalization, have just recently developed. The policy of UK governments as a whole has been shaped quite heavily by major economic events during this period, and the legacy left by the Conservative and Labour governments can still be seen today....   [tags: UK Economy, Politics]

Better Essays
2085 words (6 pages)

The French Economy Essay

- France Economic Conditions- France is widely known as having one of the most consistently stable and developed economies in the world. France takes membership among the G8 group which is comprised of the world's most industrialized countries. In the Fortune Global 500 which ranks countries by revenue, France places 1st in Europe and 4th in the world. The French economy is the 5th most expansive in the world and the second most expansive among European countries. France implements the system of a mixed economy which combines privately owned businesses with a great deal of government intervention and government enterprise....   [tags: Economics ]

Better Essays
1076 words (3.1 pages)

Uncertainity In Global Economy Essay

- Introduction A student received his offer letter for the admission into GMBA course, he was working in Australia, so did quick calculation and came up with an amount that he was required to transfer in USD (US dollars) for admission fees. After two months, when he went to the branch of National Australian Bank to transfer the money to Citibank Dubai, he was surprised to know that he need pay around 35% more than his initial estimate ,due to increase in USD to AUD(Australian Dollars) conversion rate....   [tags: Economics Economy]

Free Essays
1365 words (3.9 pages)

Australia's Economy Essay

- Australia's Economy Australia became a commonwealth of the British Empire in 1901. It was able to take advantage of its natural resources to rapidly develop its agricultural and manufacturing industries and to make a major contribution to the British effort in World Wars I and II. Now, Australia has a prosperous Western-style capitalist economy, with a per capita GDP at the level of the four dominant West European economies. Rich in natural resources, Australia is a major exporter of agricultural products, minerals, metals, and fossil fuels....   [tags: Papers]

Better Essays
982 words (2.8 pages)