1. Chapter 10 Section 1 Notes Spending in the public sector did not begin to rise significantly until the 1930s and 1940s(WHY?) 1. World War II required the government to spend huge amounts of money 2. The Great Depression change public opinion about the role of government (gov’t needs to regulate business, banks, etc) 3. Success of large-scale public works projects (TVA)

2. Chapter 10 Section 1 Notes Impact of Government Spending 1. Government spending affects how resources are allocated 1. Urban (welfare programs) v. Rural (missile systems) 2. Government spending influences the way in which income is allocated among families and individuals 1. Transfer payments (welfare, unemployment, SS) 3. The government competes with the private sector 1. Example: Universities and hospitals

3. Chapter 10 Section 1 Class Work 1. Identify two kinds of government spending. Provide an example for each. 2. Write down 3 public goods and/or services for which you believe taxes should NOT be used. Explain your choices. Then answer this question: Would the items listed be better produced by the private sector? Why or why not?