Article I, Section 8 of the Constitution of the United States gives Congress the power to make all laws which are “necessary and proper” to carry out its

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GOVERNMENT in our ECONOMY

Article I, Section 8 of the Constitution of the United States gives Congress the power to make all laws which are “necessary and proper” to carry out its duties.

MONEY MATTERSImpact of Government on Business Activities Within a Free Enterprise System

UNT in partnership with TEA, Copyright © All rights reserved

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GOVERNMENT in our ECONOMY

Provides protection Regulates our economy Assists business Produces goods and services and hires

workers Raises money



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Protection Provided by Government

The Federal Government oversees the activities that involve 2 or more states or other countries• Business transactions involving companies in more than

one state are called interstate commerce• Business activities within one state’s borders are called

intrastate commerce



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Protection Provided by Government

•Police and fire-fighting services•Armed forces•OSHA – Occupational Safety & Health Administration•Equal Opportunity Employer•EPA – Environmental Protection Agency•Contracts and property rights



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Police & Fire-fighting Services

• Police - A body sanctioned by local, state, or national government to enforce laws and apprehend those who break them.

• Fire Department - the department of local government responsible for preventing and extinguishing fires



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• (Military) the military forces of a nation or nations, including the army, navy, air force, marines, etc. paid for through the defense budget, which is funded through the government.

Armed Forces



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• OSHA was created by the U.S. Congress in 1971 to develop and enforce workplace safety and health rules throughout the country.

OSHA – Occupational Safety and Health Act



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• Equal employment opportunity means that all individuals must be treated equally in the hiring process, in training, and in promotion.

Equal Opportunity Employer



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• an agency of the federal government of the United States charged with protecting human health and the environment, by writing and enforcing regulations based on laws passed by Congress

Environmental Protection Agency (EPA)



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Contracts

• Contract – an agreement to exchange goods or services for something of value, usually money•May be written or unwritten•Individuals (consumers) AND businesses benefit from government enforcement of contracts



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Intellectual Property (Creations of the Mind)

• Purely intangible – cannot touch it• Patents• Copyrights• Trademarks• Music• Art• Discoveries & Inventions



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Patents

• Patents give the inventor the exclusive right to make, use, or sell the item for 17 years.



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Copyright

• Copyright law protects the creative work of authors, composers, and artists.• Continue for the life of the person receiving the

copyright and for 50 years after the person’s death• Identified with the ©



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Trademark

• Trademark is a word, letter, or symbol associated with a specific company or product.• Company names• Team names• Label designs• Identified with a symbol – a logo



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Methods used by Government to Regulate an

Economy1. Regulating Utilities:

• Public utility – an organization that supplies a service or product vital to all people• Phone service (land line)• Water• Electricity

• The rates they can charge have to be approved by government agencies



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Methods used by Government to Regulate

an Economy2. Preventing Unfair Business Practices

•Promote fair competition If a company charges different prices to

different people for the same product Monopoly – when a business has control of the

market for a product or service. No competition

Antitrust – prevent unfair practices such as false advertising, deceptive pricing, and misleading labeling.



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Government Assists Business

1. Census – helps business decide where the most potential customers are

2. Bureau of Labor Statistics3. Department of Agriculture4. Department of Commerce5. Government loans (SBA –Small Business

Administration)• Tornadoes• Floods MONEY MATTERS

Impact of Government on Business Activities Within a Free Enterprise SystemUNT in partnership with TEA, Copyright © All rights reserved

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Role of Government in producing goods and services

and hiring workers1. Government buys and uses a wide range of items

Filing cabinets Fleets of automobiles Jet aircraft Computers

2. Total federal, state, and local government purchases of goods and services = 20% of all the goods & services produced in the U.S.

3. Many business depend on government contracts for survival MONEY MATTERS


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Role of Government in producing goods and services

and hiring workers4. Government hires workers

a. Government is the single largest employer in our economy

b. Police officers, fire fighters, and sanitationc. Judgesd. Secretariese. Administrative assistantsf. Lawyersg. Teachersh. Meat inspectorsi. Data analysts MONEY MATTERS


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Two Ways Government Raises Money

1. Taxes – • Income taxes• Social Security tax• Property taxes• Sales taxes• Federal Insurance Contributions Act (FICA) tax• Medicare tax

2. Borrowing – government borrows money by selling bonds• Courthouse• Convention Center



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Taxes

Income tax – tax levied on the income of individuals or business



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Taxes

Property tax – a tax that an owner is required to pay on the value of the property being taxed.



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Taxes

Sales tax – one type of tax and is calculated and collected when people purchase items or receive certain services.



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Taxes

Federal Insurance Contributions Act (FICA) tax – payroll (or employment) tax imposed by the federal government on both employees and employers to fund Social Security and Medicare: federal programs that provide benefits for:• retirees, the •disabled, and •children of deceased workers



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Taxes

Social Security Tax – tax collected to fund Social Security program. The contribution on this tax is 6.2% of an employee’s income paid by the employer, and 6.2% paid by the employee (12.4% total). This tax has a maximum cap limit amount.



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Taxes

Medicare tax – tax collected to fund the Medicare program. (Health insurance program for the elderly and disabled.)



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Government Raises Money by Selling Bonds

Bonds are ‘loans’ to the government



Documents

Article I, Section 8 of the Constitution of the United States gives Congress the power to make all laws which are “necessary and proper” to carry out its