2.

2 EVALUATING ECONOMIC PERFORMANCE

Objectives After this section, you will be able to: ! Describe the basic economic and social goals used to evaluate economic performance. ! Evaluate the trade-offs among economic and social goals.

Introduction
! Every economic system has goals to carry out economic choices. ! If the system falls short, then we may demand laws to change the system until the needs are met.

Economic and Social Goals

1.! Economic freedom - freedom for people to make their own economic decisions. Highly valued goal in the WHAT CAREER TO U.S.
HAVE? WHAT TO BUY?

WHAT COMPANY TO WORK FOR?

Economic and Social Goals

2.! Economic efficiency - resources are used wisely and benefits gained are greater than the costs incurred. What effect does efficiency have on the number of goods available? Higher efficiency produces a larger number of goods.

Economic and Social Goals

3.! Economic equity - social goal that explains why so many people support laws against wage and job discrimination. Equal pay for equal work!

Economic and Social Goals

4.! Economic security - social goal that results in programs to help support the ill, the elderly, and workers who have lost their jobs. (ex. Social Security Act)

Economic and Social Goals

5.! Most economic systems strive for full employment, or providing as many jobs as possible.

Economic and Social Goals

6.! Price stability- freedom from inflation. Important to anyone trying to provide basic necessities on a limited income and for anyone planning their economic future.
! ! Inflation Rise in general level of prices Fixed income income that doesnt increase even though prices go up.

Economic and Social Goals

7.! Economic growth the nations population is likely to increase, economic growth is necessary to meet everyones needs.

Trade-Offs Among Goals

! When goals are at odds, people must compare costs to benefits before resolving the conflict. ! Most of the time, people, businesses, and government are able to work out conflicts among goals. ! The flexibility of the American economic system allows choices and compromises.

10

Debates in Economics
Should the minimum wage be increased? Turn to Pg. 30 in your text. 1.! Answer Analyzing the Issue #1-2 2.!With your partner, decide which position on minimum wage to support. ! Sketch a visual advertising campaign promoting the position you support. ! Ideas include posters, bumper stickers, Tshirt logos, billboard, mugs, etc.