Economic Goals for the US Economy

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  • 0:01 Economic Goals
  • 0:42 Stability and Security
  • 2:26 Freedom and Equity
  • 3:40 Growth and Efficiency
  • 4:24 Full Employment
  • 4:48 Lesson Summary
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Lesson Transcript
Instructor: Christine Serva

Christine has an M.A. in American Studies, the study of American history/society/culture. She is an instructional designer, educator, and writer.

This lesson will highlight the key economic goals of the United States economy, including examples to help you remember these different values. You'll also consider some of the challenges of balancing these goals.

Economic Goals

When you hear news about the status of the economy, you'll often find that the report will include statistics about unemployment. An unemployment rate that's headed upward causes concern because one of the economic goals of the United States is a low unemployment rate, also described as full employment.

The aim for full employment is just one of multiple overarching goals of the United States economy. In this lesson, you'll learn about each of these goals and come away with a better sense of what is meant by a good economy versus a bad economy.

Stability and Security

How do you think you'd feel if one day a ticket to the movies was $9.00, and the next day it changes to $25? Stability in prices is a goal of the U.S. economy and is measured primarily by whether there is inflation or deflation. Inflation occurs when prices increase across the board for everything from the cost of movie tickets, to the cost of milk.

But a price drop in movie tickets could be a sign of trouble, too. Deflation occurs when prices decrease across the board. While price decreases sound like a good deal for consumers, it's not a good deal for the economy as a whole. For instance, if the owners of the movie theater can't make a profit, perhaps part-time jobs at the theater won't exist anymore either. Stability in prices is the desired goal with only a small amount of inflation.

Stability is related to another goal, that of security. You've probably heard of Social Security benefits, which include money older adults receive after a certain age. These benefits are one way of protecting those beyond the average working age and those with disabilities from living in extreme poverty.

There are other ways that you are protected by efforts geared toward security, often without even knowing about it. If you've ever made a deposit into a bank, you may have noticed that, up to a certain amount, your money is FDIC insured. The FDIC, or Federal Deposit Insurance Corporation, was created in 1933, at a time when banks had been failing right and left. With this program in place, if your bank suddenly goes out of business, there is an insurance policy that will make sure you don't lose your money.

Freedom and Equity

But who gets to say whether you put money in the bank or spend it on going to the movies? If you're an adult, the answer is that you decide. This is an example of the goal of economic freedom. This value of our economic system puts emphasis on the rights of individuals and businesses to decide how to use their own funds.

Sometimes challenges can arise when a goal, like economic freedom, bumps up against a goal, like security. Should you have to set aside part of your paycheck for Social Security, even if you don't want to do this? Since both freedom and security are valued, sometimes a balance must be struck between the two, rather than any one goal trumping all the others.

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