Economics

1. How does the government intervene to protect public health, safety and well-being? 2. What are the main programs through which the government redistributes income? 3. What are the differences between the public and private sectors? 4. What are some examples of “negative externalities”? 5. What are some examples of “positive externalities”? 6. Why are street lights an example of a public good? 7. How does calculating GDP help the government track the business cycle? 8. What are the phases of the business cycle? 9. What’s the difference between micro and macroeconomics? 10. What is the government’s role in encouraging innovation?

Define Terms on pgs. 23, 28, 34 & 40 1. What are the three key economic questions? 2. What are the five main economic goals? 3. How do a traditional economy, a market economy, a centrally planned economy and a mixed economy differ? 4. How does a capitalist system allocate scarce resources? 5. Study the Circular Flow Model of a Market Economy on pg. 30. What is exchanged in the factor market? 6. What is exchanged in the product market? 7. What did Adam Smith mean by “The Invisible Hand” of the marketplace? 8. In what kind of economic system does the government own key industries? 9. How do socialism and communism differ? 10. Study the Circular Flow Model of a Mixed Economy on pg. 42. In what ways does the government participate in the marketplace?