Unit VIII – The American Economy
Competency Goal 8: The learner will analyze features of the economic system of the United States.
• Factors such as, free enterprise, competition, private ownership of resources and government regulation of business can have a negative
or positive impact on the U.S. economy.
• Promoting free enterprise while protecting consumers may influence the policies of the U.S. government which may require government
intervention in business.
• Increases or decreases in the supply and demand of goods may impact US consumers and producers.
8.01 Compare characteristics of command, market, traditional, and mixed economies.
• How does a market economy protect consumers?
• What are the advantages and disadvantages to consumers when the government intervenes in the economy?
• Why might a nation choose one economic system over another?
Basic Economic Questions
Mixed Market economy
What to Produce?
How to Produce It?
How Much to
For Whom To
8.02 Describe how the free enterprise system encourages private ownership of property and promote individual initiative.
• Why is the private ownership of resources a vital part of the free enterprise system?
• What roles do security and freedom play in the free enterprise system?
• How does the government protect individual initiative and what are the advantages and disadvantages of these protections?
Division of Labor
Goals for Free
8.03 Explain the circular flow of economic activities and how interactions determine the prices of goods and services.
• How would a disruption in any segment of the circular flow of economic activity impact the other parts?
• How does the capitalist system of economic exchange promote economic interdependence?
• What impact does government regulation have on the circular flow model?
Economic Exchange Markets
Circular flow model
8.04 Illustrate how supply and demand affects prices.
• How does the government affect supply and demand schedules in the U.S. economy?
• Why do consumers choose substitute goods and how these goods impact price?
• What factors affect a household’s disposable income?
8.05 Predict how prices change when there is either a shortage or surplus.
• What are the advantages and disadvantages of wage and price controls and what affect do they have on the economy?
• How do consumers and markets react to both shortages and surpluses?
• What role does the government play when either a shortage or surplus of goods and services exists?
Wage and price control
8.06 Explain how changes in the level of competition can affect price and output levels.
• Why is competition good for consumers?
• What impact can the government have on competition and how does its influence affect both consumers and producers?
• What are the advantages and disadvantages of a globally competitive market for consumers and domestic companies?
Buyers and sellers
8.07 Identify and describe the roles and functions of various economic institutions and business organizations.
• What role does organized labor play in protecting workers and how does it impact prices and consumers?
• How does the government protect consumers and small businesses and ensure fair competition?
• How do sole proprietorships contribute to the spirit of the United States’ economic system?
(Types of Business)
Stock, Stock market
Social Security Act of 1935
Nat’l Labor Relations Act, 1935
Fair Labor Standards Act, 1938
Taft-Hartley Act, 1947
8.08 Evaluate the investment decisions made by individuals, businesses, and the government.
• How does fiscal policy impact investment decisions made by individuals and businesses?
• How does the U.S. economic system allow for individual freedom and economic security?
• What impact does investment by businesses and the government have on prices and consumers?
Personal Financial Literacy
Savings & Loan
(Types of Insurance)
Objective 8.09: Describe the role of money in trading, borrowing, and investing.
• What ensures the value of the American dollar and how does its value impact prices, international trade, and investment decisions?
• What impact does credit have on individual and businesses?
• How might the overuse of credit affect a consumer?
(Functions of money)
Medium of exchange
An Outline of the U.S. Economy