2. 1. What part of the Constitution allows the Supreme Court to declare a state law unconstitutional? 2. Which principle says people have the right to rule themselves? 3. Explain the case Leandro v. NC (1997). 4. Explain the case Swann v. Charlotte- Mecklenburg Board of Ed (1971).

4.  Proposed by President and passed by Congress each year  Appropriations bill: bill that sets aside $ to be spent  Surplus—extra $; Deficit—not enough $

5.  Forms of taxation: › Progressive tax—the more you make, the more you pay › Regressive tax—the proportion you pay decreases as your pay increases

6.  Federal income tax--progressive  Social Security tax—regressive › $ goes specifically to Social Security program  Luxury/Excise tax—regressive › Tax on things we don’t need  Tariff—regressive › Tax on imported goods  Bond › Loans taken out by the government

7.  Largest areas of federal spending: › Social Security ~22% › National Defense ~18% › Income security (“welfare”) ~14% › Medicare ~14% › Interest on National Debt ~8%

8.  What happens to demand for vehicles that get poor gas mileage when gas prices increase?  What can the Federal Reserve do to end a recession?  Congress has just passed a law increasing the tax on tobacco products to $1.01 per item. Which type of law does this scenario describe?  What effect does inflation have on consumers?

10.  Solves problem of scarcity  Creates jobs  To reflect comparative advantage › The ability of a country to produce a good at a lower cost than another country can

11.  Imports: a good purchased from one country by another  Exports: a good produced in one country and sold to another  Free Trade: trading between countries without restrictions

12.  Tariffs—used to protect domestic industries  Quotas—limits on the amount of foreign goods imported into a country

13.  North American Free Trade Agreement (NAFTA) › Made in 1994 between Canada, Mexico, and US › Will trade without any restrictions  European Union › Combines 15 European countries into one large economy

14.  Balance of trade: difference between value in imports and exports › Trade surplus: value of exports exceed imports › Trade deficit: value of imports exceed exports  Exchange rate

15.  Put these events in order: National Convention, Primary Election, Votes cast in the Electoral College, General Election.  Explain the case Hazelwood v. Kulhmeier.  What are the economic results of high unemployment?  What happens when the real GDP goes up?

17.  Definition: Supply and demand (producers and consumers) control the market  Government has little involvement in economy  Other names: Free Enterprise system, Capitalism  Examples: US

18.  Definition: The government controls the economy  Everyone has equal share of the government’s profits  Other names: Communism, socialism  Examples: North Korea, China

19.  Definition: both the government and supply/demand control the markets  The government controls some industries, while supply and demand control others  Examples: Canada, Britain, France

20.  Definition: The economy is controlled by traditions, customs, and bartering › Bartering: a system where individuals trade their goods/services for other goods/services  Examples: the most poor, rural countries in the world

22.  Draw illustrations for and explain the 4 economic systems.

24.  Keep order  Provide security  Provide services  Guide the community

25.  Key meaning: rule by the people  2 Types: › Direct—people rule themselves directly › Representative—people elect representatives to rule them  Examples: US, Great Britain, Japan

26.  Key Meaning: a government in which one leader or small group hold absolute power › Dictators › Totalitarian governments  Examples: Nazi Germany, North Korea

27.  Anarchy: a situation in which there are no laws and no law enforcement

28.  Ballot Box #10 Study Guide  BB #10 Vocabulary  International Trade Notes  May 8 Class Starter