Question

Text B. American Economy The United States has a mixed economy because privately owned businesses and government both play important roles. Indeed, some of the most enduring debates of American economic history focus on the relative roles of the public and private sectors. The American free enterprise system emphasizes private ownership. Private businesses produce most goods and services, and almost two-thirds of the nation's total commercial output goes to individuals for personal use (the remaining one-third is bought by government and business). The consumer role is so great, in fact, that the country is sometimes characterized as having a "consumer economy". However, like in all modern economies, there are limits to free enterprise and private ownership. Americans generally agree that some services are better performed by public rather than private enterprise. For instance, in the United States, government is primarily responsible for the administration of justice, education (although there are many private schools and training centres), the road system, social statistical reporting, and national defence. In addition, government often is asked to intervene in 92 the economy to correct situations in which the price system does not work. It regulates "natural monopolies" and it uses antitrust laws to control or break up other business combinations that become so powerful that they can surmount market forces. Government also takes care of issues beyond the reach of market forces. It provides welfare and unemployment benefits to people who cannot or will not support themselves, either because they encounter problems in their personal lives or lose their jobs as a result of bad economy. Government pays much of the cost of medical care for the aged and those who live in poverty, it regulates private industry to limit air and water pollution, it provides low-cost loans to people who suffer losses as a result of natural disasters; and it has played the leading role in the exploration of space, which is too expensive for any private enterprise. All of this is paid for by a system of progressive taxation. In this mixed economy, individuals can help guide the economy not only through the choices they make as consumers but through the votes they cast for officials who shape economic policy. In recent years, consumers have voiced concerns about product safety, environmental threats posed by certain industrial practices, and potential health risks citizens may face. The government has responded by creating agencies which aim to protect consumer interests and promote the general public welfare. The US economy has changed in other ways as well. The population and the labour force have moved from farms to cities, from fields to factories, and, above all, to service industries. In today's economy, the providers of personal and public services far outnumber producers of agricultural and manufactured goods. As the economy has grown more complex, statistics also reveal over the last century a sharp long-term trend away from self-employment toward working for others. 1.What are the examples of services better performed by public enterprises? 2.How does the government regulate the economy? 3.How does the government addresses issues beyond the reach of market forces? 4. Who pays for the cost of the medical care for the aged? 5.What concerns did consumers voice in recent years? 6.What were the changes in the US economy lately?

Answer 1

1. The administration of justice, education, the road system, social statistical reporting and national defence are the examples of services better performed by public enterprises.
2. The government regulates "natural monopolies" by using antitrust laws to control or break up other business combinations that become so powerful that they can surmount market forces.
3. The government provides welfare and unemployment benefits to people who cannot or will not support themselves, either because they encounter problems in their personal lives or lose their jobs as a result of bad economy.
4. The government pays much of the cost of medical care for the aged and those who live in poverty.
5. In recent years, consumers have voiced concerns about product safety, environmental threats posed by certain industrial practices, and potential health risks citizens may face.
6. The population and the labour force have moved from farms to cities, from fields to factories, and, above all, to service industries.

Answer 2

The passage you provided discusses the American economy, its characteristics, and the role of both the public and private sectors in it. Let's break down the key points in the text:

1. Mixed Economy: The United States has a mixed economy, which means it incorporates elements of both capitalism and government intervention. In a mixed economy, privately owned businesses and government play important roles.

2. Free Enterprise System: The American economic system emphasizes private ownership, and most goods and services are produced by private businesses. Nearly two-thirds of the nation's commercial output goes to individuals for personal use, making it a "consumer economy."

3. Government's Role: While private enterprise is central, there are certain services and functions that are better performed by the government. These include the administration of justice, education, the road system, social statistical reporting, and national defense.

4. Government Intervention: The government also intervenes in the economy to correct situations where the price system does not work. It regulates natural monopolies, enforces antitrust laws, and addresses issues beyond the reach of market forces. This includes providing welfare, unemployment benefits, and healthcare for the aged and those in poverty, regulating private industry to limit pollution, and providing low-cost loans for natural disaster victims.

5. Funding: Many of these government functions are funded through a system of progressive taxation, where those with higher incomes pay more in taxes.

6. Democratic Influence: In this mixed economy, individuals can influence economic policy not only through their choices as consumers but also by voting for officials who shape economic policy. The democratic process allows citizens to have a say in the economic decisions made by the government.

7. Changing Economy: The U.S. economy has evolved over time. There has been a shift from an agrarian society to an industrial one, and now to a service-oriented economy. This has led to a significant change in the composition of the labor force, with more people working in service industries than in agriculture and manufacturing.

8. Decline in Self-Employment: Statistics indicate a long-term trend away from self-employment, with more individuals working for employers rather than being self-employed.

In summary, the American economy is characterized as a mixed economy with a strong emphasis on private ownership and enterprise, but with significant government involvement in various aspects of economic life to ensure the public welfare and address market failures. The system is funded by progressive taxation, and individuals have a role in shaping economic policy through democratic processes. The economy has undergone significant changes, with a shift towards a service-based economy and a decline in self-employment.