Question

please explain with lengthy explanations

1. How did the federal government help capitalist enterprises in the 1800s?

2. Give examples of ways in which the government can alter each determinant of the profit rate.

3. Describe the various means through which capitalists influence the government to adopt the policies they favor. What are some examples of such methods?

4. In the 1980s, Chrysler CEO Lee Iacocca argued that Canadian auto plants had a big advantage over auto factories in the US, because Canada has a public health system and auto companies would not have to pay health care benefits to its workers or the autoworkers’ union. Should this fact cause U.S. automakers to lobby for a universal health care system in the United States.

Answer 1

ANS1

US economic growth in the second half of the 1800s had been the fastest in its history, generating significant increases in production, wages and personal wealth. The two world wars were costly for the US – but they also invigorated its economy and strengthened its place as the world’s most significant economic and military power.

In the two decades before 1880, the amount of railroad track tripled, allowing the free movement of people and cargo. Coal mining and steel manufacture boomed, fuelled by new technical developments and production methods. Factories, mines and farms all benefited from mass-produced machinery, which became cheaper and more accessible.

The tremendous opportunities in 19th century capitalist America sparked a surge in immigration. Millions of migrant workers crossed the seas from Europe and Asia, seeking job opportunities as well as political and religious freedom. American cities like New York, Chicago and Philadelphia swelled with newcomers

ANS2-The five determinants of demand are:

The price of the good or service.

Income of buyers.

Prices of related goods or services. These are either complementary, those purchased along with a particular good or service, or substitutes, those purchased instead of a certain good or service.

Tastes or preferences of consumers.

Expectations. These are usually about whether the price will go up.

For aggregate demand, the number of buyers in the market is the sixth determinant.

ANS3-The proper role of government in a capitalist economic system has been hotly debated for centuries. Unlike socialism, communism, or fascism, capitalism does not assume a role for a coercive, centralized public authority. While nearly all economic thinkers and policymakers argue in favor of some level of government influence in the economy, those interventions take place outside of the strictly defined confines of capitalism.

Voluntary trade is the mechanism that drives activity in a capitalist system. The owners of resources compete with one another over consumers, who in turn, compete with other consumers over goods and services. All of this activity is built into the price system, which balances supply and demand to coordinate the distribution of resources.

These concepts—private ownership and voluntary trade—are antagonistic with the nature of government. Governments are public, not private institutions. They do not engage voluntarily but rather use taxes, regulations, police, and military to pursue objectives that are free of the considerations of capitalism.