Evaluating Economic Performance

Section 2 Vocab

• Social Security• Inflation• Fixed Income

7 ECONOMIC GOALS

1 Economic Freedom• People like to choose

their own occupations, employers, and uses for their money.

• Business owners like the freedom to choose where and how they produce.

7 ECONOMIC GOALS

2 ECONOMIC EFFICIENCY

decision making must be efficient so that benefits gained are greater than costs incurred.

7 ECONOMIC GOALS

3 ECONOMIC EQUITY

Americans have a strong sense of justice, impartiality, and fairness.

Equal pay for equal work.

No false advertising or lies about products.

7 ECONOMIC GOALS4 ECONOMIC SECURITY

Americans desire protection from such adverse economic events as layoffs and illnesses. (Recessions & economic down turns)

SOCIAL SECURITY• Social Security–

a federal program of disability and retirement benefits that covers most working people.

Website: http://www.ssa.gov/

7 ECONOMIC GOALS5 FULL EMPLOYMENT

When people work, they produce goods and services for themselves.

When people don’t work, they don’t earn wages and they don’t spend money on goods and services.

7 ECONOMIC GOALS

6 PRICE STABILITY

Prices do not rise and fall sharply but may be adjusted over time.

Inflation–a rise in the general level of prices.

When inflation occurs, workers need more money to pay for food, clothing, and shelter.(Transportation and disposable income)

Fixed Income

• Fixed Income –an income that does not increase even though prices go up.

• Usually this includes retired people.

• High rates of inflation cause rises in interest rates, which slows business activity by discouraging businesses from borrowing and spending.

7 ECONOMIC GOALS7 ECONOMIC GROWTH• Growth is needed so that people can have more

goods and services. • Because the nation’s population is likely to

grow, economic growth is necessary to meet everyone’s needs.