Chapter 18
Public Finance
Start it out  page 481
 Civics in the Real World
 Read about Deborah
 Answer Citizen’s Journal (your note book)
 Make a list of what we get in exchange of
taxes
18.1
Government and Economic Goals
Vocabulary (look up here )
 Full Employment
 National Income Accounting
 Economic Growth
 Inflation
 Deflation
 Boo Yah!!!!!
Government and Economic Goals (cont.)
 Main Idea:
The federal gov’t plays an important economic
role. It provides jobs, keeps prices stable, taxes
and spends in a pattern that stimulates economic
growth.
Where does the word “economy” come from??
Compliment Game Anyone? Ayyy Lmao
Full Employment & Price Stability
The Employment Act of 1946
 WWII over, the boys come home!
 They need jobs
 Fear of Depression -> Congress went to
work, passed the bill with the intention
promote employment
“… the General Welfare”
 Where did you hear or see that before?
 Compliment point!
 … became the pretense for the Gov’t to
take action
 Gov’t assumed responsibility and
committed to F.E. & P.S.
Full Employment
Unemployment is ugly stuff …
 Disrupts families
 Crime
 Productivity
Full Employment – every person who wants
to work, should have a job!
Price Stability
 Broke in the store– bummer
 Employment Act of 1946 – … the federal gov’t will “promote
maximum … purchasing power” through the use of
economic power to stabilize
The Constitution made the ground rules for a market economy:
 Protection of private property against theft
 Corporation laws
 Populate expectation
Compliment point!
What was the chief
Goal of the
Employment Act of
1946?
????????????????????????????????????
The Act commits the government to
providing jobs for all who want them
and promoting maximum purchasing
power for price stabilization! DANG
dats GOOD!
Government and the Circular Flow
 Compare the charts on pages 484-
485 to 378-379 …
 read 484
 What is different?
 What is the same?
 Answer a. & b. on 484 …
Adding Gov’t to the Circular Flow
 484 – 485
 Center icon is Gov’t (Federal, State & Local)
 All have power to TAX
 PROVIDE GOODS AND SERVICES
 Fed- National defense
 State – higher education / State Parks
 Local – Public Education / Libraries
MIXED ECONOMY
Businesses
Pay for taxes out of their profits
 Federal
 State
 Local
 Property taxes
 Gasoline
 Vehicles –cars / trucks
Gov’t provides
 Highways
 Police protection
Individuals …
 Almost all pay taxes
 Largest is Federal Income Tax (04.15.16)
 State taxes
 Sales tax
 Local taxes
 Vehicles taxes
Individuals cont.
 Federal government provides
 Disaster relief, Health care, Social Security, Veteran’s
Benefits,
 State Gov’t provides
 Education, Transportation, Judicial Services
 Local Gov’t Provides
 Public education, public safety, hospital services
Civics and Economics 486
Read aloud RSS
Analyze Economics
Answer 1 & 2 via RSS
Reading Check page 486 …
What role does the
government play in the
flow of economic
activity??
Compliment point?
Reading Check …
The government taxes
business and individuals. It
provides goods and
services in exchange for
the taxes it collects.
National Income Accounting
 Keeps track of overall spending and income
 Data on production
 Data on Earnings, Savings and Investments
 Is an indicator of economic health
http://www.usdebtclock.org
What does our economic health look like?
Gross Domestic Product
 Total dollar value of all goods and services sold per year
 Monetary Measure
 Wide variety of goods & services (G & S)
 Non-productive payments excluded
 Buying & selling of stocks not included (exchange of paper)
 Value of G & S counted once (used car v. final price-new car)
 Calculating GDP ( chart page 487)
Spending, Income and GDP
 healthy economy, total spending = total income
 What is spent in GDP = income to those produced
 Flow chart- 484-485,
 spending side=G&S bought
 Income side = value wages, salaries, investment interest,
rents and profits
 Page 488
GDP
LOOK AT THE GRAPH ON
488
ANSWER 1 & 2
Policy Goals to Improve the Economy
 GDP = measure of economic health
 Yearly increases without major price increases = economic growth
 Government GOALs---
 Economic Growth: is an increase in the production of G&Ss that
bring a higher standard of living
 Full employment - jobs
 Price stability – maximum purchasing power
What to AVOID!
INFLATION:
THE LARGE INCREASES IN
OVERALL PRICES …
What ELSE to AVOID!
DEFLATION:
CAN YOU
GUESS IT??
DEFLATION ACCORDING TO BRADY !
DEFLATION :
THE (OVERALL)
DECREASE IN
PRICE LEVELS
Reading Check page 489
Why is economic growth
important?
Economic growth makes a
higher standard of living
possible.
IN YOUR NOTE BOOK:
2A-4B
Stay seated
until the bell
rings