This document provides an overview of key economic concepts: - Individuals own resources and earn income, businesses use resources to produce goods and services for profit, and the government provides public goods and services using tax revenue. - Savings by individuals and businesses provide capital for business expansion and consumption. - Public goods benefit many simultaneously, are best provided by the government, and are funded through taxes and borrowing. - Government taxing, borrowing, and spending impact demand, production, employment and taxes in the economy. - A mixed economy promotes competition through antitrust laws, trade, and new businesses while regulating industries and protecting consumers.

1. Review SheetUse the following slides to fill in your review sheet for your test on Friday

2. Individuals/Households:own the resources used in production, sell the resources for a paycheck,and use the income to purchase goods and services.

3. Businesses/Producers:buy resources (human, natural, capital, and entrepreneurship),make products and sell them to individuals, businesses, and the government,and use the profit to buy more resources.

4. The Government:The government uses tax revenue (money) from individuals and businesses to provide public goods and services.

5. Saving and Investing MoneyIndividual and business savings provide financial capital that can be borrowed for business expansion (growth) and increased consumption.

6. THE THREE CHARACTERISTICS OF PUBLIC GOODS AND SERVICES:Public goods/services provide benefits to many simultaneously.They are provided by the government because individuals acting alone could not provide them as efficiently.Therefore, they wouldn’t be available if we had to provide them ourselves.

7. The government produces public goods and services by…using tax revenue from individuals and businesses to pay for them.They also borrow funds from other countries.The 16th Amendment authorizes Congress to tax personal & business incomes.

8. The effects of government taxing, borrowing, and spending: TAXING LESS: ↓TAX = ↑ MONEY TO SPENDTAXING MORE: ↑ TAX = ↓ MONEY TO SPEND BORROWING MORE: ↑ GOVERNMENT BORROWING =↓ BORROWING FOR USBORROWING LESS: ↓ GOVERNMENT BORROWING =↑ BORROWING FOR US

9. The effects of government taxing, borrowing, and spending - continued: SPENDING MORE: ↑ GOVERNMENT SPENDING = ↑ DEMAND, ↑PRODUCTION, ↑ EMPLOYMENT, AND ↑ TAXES SPENDING LESS: ↓ GOVERNMENT SPENDING =↓ DEMAND, ↓ PRODUCTION, ↓ EMPLOYMENT, AND ↓ TAXES

10. A MIXED ECONOMY:PROMOTING COMPETITIONANDPROTECTING CONSUMERS3 Benefits of competition:1. more variety 2.better quality 3. lower price

11. The government supports competition by-1. enforcing antitrust legislation to stop monopolies. antitrust- stopping one business from controlling a market 2. engaging in global trade 3. supporting new business start-ups, which also provides more jobs.

12. The government regulates businesses by setting up agencies to oversee the way individuals and companies do business.Environmental Protection Agency (EPA)- protects human health and the environmentFederal Communications Commission (FCC)- regulates communications by radio, television, and satelliteFederal Trade Commission (FTC)-protects consumers and promotes competition

13. THE GOVERNMENT PROTECTS CONSUMER RIGHTS BY:Government agencies establish guidelines that protect public health and safety.Negotiated contracts protect private ownership and are enforceable by law.Consumers may take legal action against violations of consumer rights.