Name _________________________ Class _______________ Date _______________
CHAPTER
3
CHAPTER OUTLINE
American Free Enterprise
2
Directions: Fill in the outline below. Filling in the blanks will help
you as you read and study Chapter 3.
I.
Section 1: Benefits of Free Enterprise
A. Characteristics of the Free Enterprise System
1. Four principles of free enterprise are the ____________________
motive, ____________________ equality, private ____________________ ,
and voluntary ____________________ .
2. Consumers send ________________________ to businesses by buying
or not buying a good or service.
B. Role of the Constitution and Government
1. The Constitution protects the right to ____________________
____________________ and to make ____________________ .
It also spells out rules about ____________________ .
2. The government keeps consumers ____________________.
It also protects the ____________________ ____________________
by regulating some ____________________ activities.
II. Section 2: Promoting Growth and Stability
A. Why the Government Tracks Business Cycles
1. ____________________ is the study of the overall economy.
____________________ is the study of the economy that focuses
on small units.
2. Up and down patterns in the ____________________ are called the
business cycle.
B. How the Government Promotes Economic Strength
1. The government has three goals to promote economic strength: high
__________________ , ___________________ , and ___________________.
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96
Name _________________________ Class _______________ Date _______________
CHAPTER OUTLINE (continued)
American Free Enterprise
2
2. Improved ____________________ increases productivity. The
government promotes new ideas by granting ____________________
and ____________________.
III. Section 3: Providing Public Goods
A. Characteristics of Public Goods
1. Public goods are those that would be hard to make people pay for
____________________ and hard to ____________________ free riders
from using.
2. Everyone pays for public goods through ____________________.
B. Why Public Goods Are Examples of Market Failure
1. Public goods are examples of market failure because the
____________________ ____________________ cannot distribute
them ____________________.
2. Externalities are economic ___________________ ___________________.
IV. Section 4: Providing a Safety Net
A. Helping Those in Poverty
1. ___________________ is government aid for those in need.
2. The government’s four main ___________________ transfer programs
are ___________________ Assistance for Needy Families (TANF),
___________________ Security, ___________________ insurance, and
workers’ ___________________.
B. Private Action to Help the Needy
1. Tax law encourages donations to private ___________________ , and
government gives ___________________ to groups that provide social
services.
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97