The document discusses several economic and government policy topics including: 1) The U.S. government spends around $3 trillion per year and runs an annual deficit because spending exceeds taxes and other revenues. 2) Issues like global warming require international solutions because the costs of carbon emissions are not fully accounted for and impact the global environment. 3) People are more comfortable with government spending on manufacturing but uneasy about spending on healthcare and education because the former generates income while the latter only incurs costs. 4) State governments spend the most on administration and education.

1. CHAPTER 17<br />Question for Review and Discussion<br />About how much does the federal government spend each year to finance its activities? As a result, does it run a deficit or a surplus?<br />3 trillion, deficit because they spend more than 1 trillion in their activities.<br />What has the U.S. government done so far in response to the issue of global warming, and why does this issue require an international solution?<br />The economic answer to the problem of global warming is to see that the costs of the decision to use carbon-based fuel are taken into account by the decision maker.<br />While spending more money on manufacturing goods is looked upon favorably, why do people feel uneasy about additional spending in health care and education?<br />Because in manufacturing goods people earn money but in education and health they only spend.<br />On what major category do state governments spend the most money per year?<br />Administration & Education<br />What is fiscal policy, and what entity conducts it?<br />Is a policy of using the government budget surplus or deficit to influence the level of spending and income in the economy. <br />What is monetary policy, and what entity conducts it?<br />Is a policy in which the central bank varies the level of money and credit in the economy to affect the level of income<br />What problems is the government likely to face in paying social security benefits in the future?<br />Provide some cushion against the future imbalance between the numbers of people paying in compared to the number of people warming out. <br />What is the Keynesian view?<br />Government can and should play a stabilizing role in the economy.<br />Should the federal government allow an unlicensed lawyer to practice law? Why or why not?<br />What problem will most likely arise when tariffs are imposed?<br />Invest mount decreases, interest role rise the multiplied effect demand on the level of income.<br />What two measures did the U.S. government take to stop the 2008-2009 financial crisis? What effect will they have in the long run?<br />Instituted massive financial bailout of banks and financial institutions, instituted a massive fiscal stimulus package, increasing its spending enormously, while waiting taxes.<br />Will outsourcing ultimately lead to a shift of all U.S. manufacturing to lower-wage countries?<br />Give two examples of how government laws can indirectly influence the distribution of income.<br />The author s rights, licensed lawyers and teachers.<br />What is the law of one price, and what does it mean for the wages of U.S. workers?<br />If a free flow of resources and technology exists equals productive factors will tend to earn equal amount and tradable goods will tend to have the same price.<br />What is the Mickey Mouse protection act? Is it good public policy?<br />Patent and copyright protection is useful because it creates incentives for the development of new technologies and products.<br />