Mandatory v. Discretionary Spending To explicitly assess information and draw conclusions

Review Test http://www.youtube.com/watch?v=RiQ3lgtl_gs&t=25m58s

What would happen to: Revenue (Receipts) Spending (Outlays) Deficit Unemployment rises due to a financial crisis Companies have expanded their production The terrorist threat level has been lowered The baby boomers are retiring earlier than planned Revenue (Receipts) Spending (Outlays) Deficit Debt

Definitions Mandatory: parts of the federal budget that are set by law and are uncontrollable/adjustable Discretionary: parts of the federal budget over which Congress has complete control

Pie Charts Turn your desks into groups of 4 With your group, look through the pie charts and answer the questions that go along with them

Quiz Answers 1. Discretionary 2. Outlays 3. Social Security 4. Debt 5. Deficit 6. Federal Budgets Office of Management and Budget

Free Ride Problem Goods and Services that are accessible and beneficial to all Things that you could benefit from, whether or not you paid Why we have taxes! The government provides the goods and services to all but can’t afford to have “free riders” Privatization: handing over control of public functions to private companies. Can refer to goods or services Public Sector: part of the economy concerned with providing basic government services Includes such services as the police, military, public roads, public transit, primary education and healthcare for the poor