1. Gov Review: Unit #5 In 10 Minutes!
Everything You Need To Know About Unit #5 In (Hopefully) 10 Minutes

2. Monetary & Fiscal Policy
Monetary - controlled by the Federal Reserve (FED)
Control the supply of $
Fiscal Policy - Government spending and tax rates in a given year
The president proposes a budget, Congress passes the budget

3. The Budget Key Terms: Deficit spending - spending exceeds revenues
Balanced budget - government spends as much as it brings in
16th amendment - created the graduated income tax
Excise tax - tax on manufactured goods
Most federal spending is uncontrollable
Difficult to change
Social Security - increasing costs due to baby boomers retiring
Discretionary Spending - spending on programs such as defense, education, etc.

4. Making The Budget 4 Key Players: President (OMB) Congress (CBO)
Interest groups
Agencies
Agency funding is often based on prior year’s funding
Credit-claiming is important for members of Congress

5. Keynesian and Supply-Side Economics
Keynesian Economics:
Advocates government spending to help during an economic downturn
“Priming the pump”
Often associated with Democrats
Supply-Side Economics:
Advocates lower taxes, especially for businesses
Often associated with Republicans

6. Unemployment And Inflation
Unemployment rate - % of Americans that are ACTIVELY looking for work and cannot find it
Does not count part-time, or those that have given up looking for a job
Inflation - measured by the Consumer Price Index (CPI)
Compares the price of similar goods across years
Stagflation - high unemployment and high inflation (1970s)

7. Environmental And Healthcare Policy
Silent Spring - brought awareness to environmental issues
EPA (1970)
Largest regulatory agency
Clean Air Act
Many environmental laws are unfunded mandates
Medicare - provides health care to elderly (part of Social Security)
Costs are rising in recent ears

8. Quick Recap Monetary vs. Fiscal Policy
Budget - how is it made? Who influences it? Deficit spending?
Keynesian and Supply-Side Economics
Unemployment rate
Inflation
Stagflation!
Environmental agencies/acts
Unfunded mandates
Medicare and Social Security - uncontrollable spending!

9. See You Back Here For Period #6 In 10 Minutes!
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Best of luck!