CHAPTER+3

The U.S. private sector includes three groups of economic decision makers: households, firms, and the rest of the world. Households play the starring role in economy, while resource providers organize as firms. The rest of the world affects what households U.S.consume and U.S. firms produce.

The private sector runs smoothly due in large part to the government. The government provides protection to businesses and individuals. Government regulations address the shortcomings of the market.

THE US PRIVATE SECTOR Section 1

Regulating the Private Sector Section 2

Public Goods and Externalities Section 3

Providing a Safety Net Section 3