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COURSE OUTLINE
Unit 1: Fundamentals of Economics
Economics and Choice
 Chapter 1:The Economic Way of
Thinking
 Chapter 2: Economic Systems
 Chapter 3: The American Free
Enterprise
Unit 2: Microeconomics
Market Economies at Work
 Chapter 4: Demand
 Chapter 5: Supply
 Chapter 6: Demand, Supply, and
Prices
 Chapter 7: Market Structures
Unit 3:
Types of Business Organizations
 Chapter 8: Types of Business
Organizations
Unit 4: Macroeconomics
Money and Banking
 Chapter 10: Money
Unit 5:
Measuring and Monitoring Economic
Performance
 Chapter 12: Economic Indicators
and Measurements
 Chapter 13: Facing Economic
Challenges
Unit 6:
The Role of Government in the
Economy
 Chapter 14: Government, State,
Local Revenue and Spending
 Chapter 15: Using Fiscal Policy
Unit 7:
The Global Economy
 Chapter 16: The Federal Reserve
and Monetary Policy
 Chapter 17: International Trade
Unit 8:
Personal Finance
 Chapter 11: Personal Finance &
Financial Markets
CP Economics Organizer
Chapter 14: Government, State and Local Revenue and Spending
The Big Picture:
Taxes and Public Goods Governments use tax revenue to provide public goods that are not supplied by the market. Public goods benefit more than one person
at a time and their use cannot be restricted to those who pay for them. For this reason, the market cannot profitably sell the goods and therefore has no incentive
to provide them. The benefits that individuals receive from public goods are not necessarily related to the amount of taxes that they pay. Governments may use
taxes as incentives to encourage or discourage certain behaviors. Positive incentives encourage production when the price does not fully reflect the benefit of
the goods or services. Negative incentives, such as those on gambling, alcohol, and cigarettes discourage production and use because the price does not fully
reflect the costs of those products. Federal Government Taxes Individual income tax accounts for almost half of federal tax revenue. About one-third comes
from FICA social insurance taxes that include Social Security and Medicare. Corporate income taxes make up about ten percent of revenue. Federal
Government Spending Mandatory spending is required by current law. Most federal mandatory spending is in the form of entitlement programs, including
Social Security, Medicare, and Medicaid. These programs represent transfer payments by which the government redistributes income to taxpayers who do not
provide goods or services in return. About one-third of federal spending is discretionary. The largest category is national defense. Government spending may
redistribute income indirectly when it impacts the prices and output of other goods. For example, government contracts direct funds to particular regions or
companies and allocate resources to specific products. State and Local Taxes and Spending Most state and local government revenue comes from
intergovernmental revenue and miscellaneous taxes and fees. The largest single source of state tax revenue is sales and excise taxes. For local governments,
property tax is the largest source of tax revenue. Education, public safety, public welfare, and transportation are the main categories of state and local spending.
Unit Pacing:
Homework
(Reading Assignments)
____– Government Revenue and
Spending
____ – Read p. 410-422
____ – State and Local Revenue and
Spending
____—Read p. 434-438
____—RETEACHING ACTIVITIES
____—Read p. 423-432
____ – Read p. 382-402
____— Chapter 14 Definitions Test &
TEST
Key Terms and Phrases:
1. Discretionary Spending
2. Mandatory Spending
3. Tax
4. Revenue
5. Balanced budget
6. Individual Income Tax
7. Corporate Income Tax
8. Sales Tax
9. Property Tax
10. Proportional Tax
11. Progressive Tax
12. Regressive Tax
13. FICA
14. Social Security
15. Medicare
16. Unemployment
Compensation
17. Estate Tax
18. Gift Tax
19. Excise Tax
20. Customs Duty
21. User Fee
22. Entitlements
23. Medicaid
24. Office of Management
& Budget
25. Fiscal Year
Essentials Question:
GPS
1. Explain why the government establishes taxes.
2. What are the major categories of state and local expenditures?
1. SSEMA1f
Course Website: http://vhs.gocats.org/apps/pages/index.jsp?uREC_ID=549730&type=u&pREC_ID=826211
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