How does the federal government seek to promote economic growth? What strategies are involved? How is economic growth measured?

Question

Answer:

Answer 1

An ideal response will:
1. Identify the two strategies for promoting economic growth: supporting U.S. industries and encouraging national trade.
2. Specify how the government supports U.S. industry through departments and agencies that promote the economy through loans, grants, special payments, and advice on how to start new businesses.
3. Provide examples of this support, e.g., subsidies for certain crops and the U.S. Patent and Trademark Office that protects all new inventions.
4. Specify how the government promotes international trade through protectionism, a policy of erecting trade barriers to protect domestic industry that can take the form of special taxes, or tariffs, placed on imported goods to make them more expensive.
5. Explain that some tariffs do more harm than good by leading other countries to put tariffs and other restrictions on U.S. goods, resulting in a persistent trade deficit.
6. Note the importance of the General Agreement on Tariffs and Trade (GATT), the World Trade Organization (WTO), and the North American Free Trade Agreement (NAFTA).
7. Provide a concise and effective conclusion.