american history primary source documenttoddtcchs.ss8.sharpschool.com/userfiles/servers/... ·...

In this unit, you will find out how the major parts of oureconomy fit together into a system. Economists call this“macroeconomics,” and it means you will be looking at theeconomy as a whole. What role does government play in theeconomy? How does our monetary system work? You will learnabout the policies and factors that influence our economicstability in Unit 7.

Use the American History Primary Source DocumentLibrary CD-ROM to find primary sources about the federalgovernment and the economy.

Interview two local entrepreneurs about the health of the freeenterprise system. Ask about the current business climate, the stateof the economy, and government policies that affect theirbusinesses. Write a summary of your findings for your portfolio.

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Government expendituresare used to maintaintransportation systems,like this system inSeattle, Washington.

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Analyzing Information Study Foldable Make this foldable to help you under-stand the role the government plays in maintaining economic stability, ways inwhich the economy is measured, and the impact these things have on your life.

Reading andWriting As you read the chapter, takenotes by writinginformation undereach appropriate tab.

Step 3 Cut one of thelarge tabs in half toform two smaller tabsand label as shown.

500 State Building in San Francisco ▲

Draw amark at themidpoint.

Role of Government

Government, Economy,& You

Measuring theEconomy

The government’s economic policies are aimed atstrengthening the economy, solving economic problems,and protecting the economic interests of citizens. Ask alocal librarian for help in finding information on recentgovernment economic policies.

To learn more about how statistical measures are used tomonitor the economy’s performance, view the Economics& You video lesson 20: Measuring the Economy’sPerformance.

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John Elk III/Stock Boston

Step 1 Mark the midpoint of theside edge of a sheet of paper.

Step 2 Fold the outside edges into touch at the midpoint.

Chapter Overview Visit the CivicsToday Web site at civ.glencoe.comand click on Chapter Overviews—Chapter 23 to preview chapterinformation.

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502 Chapter 23 Government and the Economy

GUIDE TO READING

Main IdeaOne of our nation’s most important goals isto create an economic environment favorable to growth and stability.

Key Termsprivate goods, publicgoods, externality,antitrust law, merger,natural monopoly, recall

Reading StrategyComparing andContrasting As you readthe section, complete adiagram like the onebelow by differentiatingbetween public goods and private goods.Provide at least oneexample of each.

Read to Learn• What public goods does

government provide?• What actions does

government take to regulate economicactivity?

The Role ofGovernment

SECTION

GoodsPrivate goods

Example:

Example:Public goods

Airport security

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The economic activities of government affect your well-being every day. When you receive a check for your part-time orsummer job, you see deductions for income and Social Security taxes.Laws requiring seat belts and motorcycle helmets are governmentmandates. Another is airport security. In November2001 USA Today reported: “Congress approved anoverhaul of the nation’s aviation security systemyesterday to put the federal government firmly incontrol of airport safety operations. . . . Thelegislation would replace the private baggage-screening system with a 28,000-person federalworkforce that will inspect passengers’ luggage.The bill also would strengthen cockpit doors, putfederal sky marshals on flights and grant wideauthority to a transportation security chief whowill implement the new measures.”

Providing Public GoodsGovernment plays several important roles in the economy.

One role is providing goods and services—such as safer airtravel—that private businesses do not provide.

Most goods and services that businesses produce are private goods, or goods that, when consumed by one individ-ual, cannot be consumed by another. Consumption of privategoods and services is subject to the exclusion principle. Thismeans that a person is excluded from using that good or serv-ice unless he or she pays for it. Private goods are the items wenormally buy, for example, clothes, shoes, food, and so on.Private services include such things as insurance, haircuts,medical services, auto care, and telephone services.

This is in contrast to public goods, or goods that can beconsumed by one person without preventing the consumptionof the good by another. Consumption of public goods is sub-ject to the nonexclusion principle. This means that no one isexcluded from consuming the benefits of a public goodwhether or not he or she pays. Examples of public goodsinclude public parks, public libraries, museums, highways, andstreet lighting.

Chapter 23 Government and the Economy 503

Because of the difficulty of charging forpublic goods, the government usually pro-vides them. If government did not providethese public goods and services, then theprivate sector would not provide them inadequate amounts because it is so difficultto get people to pay for them.

As a result, the production of publicgoods is one of the responsibilities of gov-ernment. The government still has to payfor them, of course, but it raises the moneyin the form of taxes and then provides theproducts to everyone.

Defining What are publicgoods?

Dealing With ExternalitiesThe government also plays a role in han-

dling externalities. An externality is theunintended side effect of an action thataffects someone not involved in the action.Suppose a company pays end-of-yearbonuses to its workers. Restaurants andstores in the area will probably see their sales

go up because the workers have more moneyto spend.These businesses experience exter-nalities.They were not involved in the payingof bonuses, but they were affected by it.

One reason that governments providepublic goods is that these goods producepositive externalities. Everyone—not justdrivers—benefits from good roads. Goodroads make it cheaper to transport goods.As a result, those transported goods canhave lower prices, which benefits everybody.

Governments can also take actions thatindirectly lead to positive externalities. Inthe 1960s, the government wanted to put aman on the moon. The space programneeded someone to develop smaller com-puters to achieve this goal.The governmentprovided money to researchers who devel-oped tiny computer chips. Today, thosechips are found in cars, household appli-ances, and pocket calculators, benefitingmany people. Many government activitiesencourage positive externalities.

Some externalities can be negative.That happens when an action harms anuninvolved third party. Suppose a chemical

Private andPublic GoodsA ticket to thetheater is anexample of a private good.Highways are one of the publicgoods the govern-ment provides.How do privategoods differ frompublic goods?

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(l)Jacques M. Chenet/CORBIS, (r)AP/Wide World Photos


company tried to cut costs by dumping poi-sonous waste into a river. People who reliedon the river water would suffer a negativeexternality from this pollution. One of theroles of government is to prevent these andother kinds of negative externalities.

Explaining Doexternalities always have negative effects?

Maintaining CompetitionMarkets work best when there are large

numbers of buyers and sellers. Sometimes,however, a market becomes controlled by amonopoly, a sole provider of a good orservice. With no competition, a monopolycan charge any price it wants, and con-sumers may suffer.

Select Federal Regulatory Agencies

Consumer Product Safety Commission (CPSC)

Environmental Protection Agency (EPA)

Equal Employment OpportunityCommission (EEOC)

Federal Aviation Administration (FAA)

Federal Communications Commission (FCC)

Federal Energy Regulatory Commission (FERC)

Federal Trade Commission (FTC)

Food and Drug Administration (FDA)

Makes sure that products are safe

Prevents air and water pollution

Makes sure that employers do not discriminatein hiring and treating workers on the job

Oversees the air travel industry

Gives licenses to radio and television stationsand oversees prices for interstate telephoneand telegraph services

Oversees the transmission of energy

Makes sure that businesses do not engage in unfair competition

Makes sure that food, drugs, and cosmetics are pure, effective, and truthfully labeled

Oversees issues related to labor unionsand labor-management relations

Makes sure that workplaces are safe and healthful

Oversees the sale of stocks and bondsand the work of people who trade in them

AGENCY RESPONSIBILITY

National Labor Relations Board (NLRB)

Occupational Health andSafety Administration (OSHA)

Securities and Exchange Commission (SEC)

The federal government has created many agencies that regulate busi-ness. Some oversee businesses in a particular industry. Others overseecertain kinds of business activities. Which agency oversees buying andselling of stock?

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Felicia Martinez/PhotoEdit

Natural Monopolies Some local utilities (electric,gas, water) are the sole providers of their services inan area. What is a natural monopoly?

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Antitrust LawsHistorically, one of the goals of gov-

ernment in the United States has been toencourage competition in the economy.The government tries to meet this objec-tive through its antitrust laws, or laws tocontrol monopoly power and to preserveand promote competition. In 1890, thefederal government passed the ShermanAntitrust Act. This law banned monopo-lies and other business combinations thatprevented competition. In 1911, the gov-ernment used this law to break up theStandard Oil Company, which had amonopoly on oil. More than 70 yearslater, the government used the act to breakup American Telephone and Telegraph(AT&T).This action created more compe-tition in telephone service.

MergersWhenever a merger, a combination of

two or more companies to form a singlebusiness, threatens competition, govern-ment may step in to prevent it. For exam-ple, when the two leadingoffice-supply stores, Staples andOfficeMax, wanted to merge, thefederal government was able toprevent the merger. The govern-ment felt that a merger of thesetwo giant firms would result inless competition and higherprices for consumers.

On the other hand, the 2001proposed merger of Hewlett-Packard and Compaq Com-puter, two leading personalcomputer makers, attracted littleresistance from the federal gov-ernment. If the merger had pre-sented a potential problem, eitherthe Justice Department or theFederal Trade Commissionwould have been involved.

Regulating Market ActivitiesRecall that governments want to reduce

negative externalities. To carry out thiswork, they regulate some activities by busi-nesses. That is, government agencies makesure that businesses act fairly and follow thelaws. Some of the federal agencies that reg-ulate businesses are shown on the chart onpage 504. Government regulation is neededin three important areas.

Natural MonopoliesSometimes it makes sense to have a sin-

gle firm produce all of a particular good orservice for a market. For example, it wouldnot make sense to have three or four tele-phone companies compete in a local com-munity if each company had to put up itsown set of telephone poles.

This often leads to a natural monopoly,a market situation in which the costs ofproduction are minimized by having a sin-gle firm produce the product. In exchangefor having the market all to itself, the firmagrees to be regulated by the government.

AP/Wide World Photo


Checking for Understanding1. Key Terms Write a paragraph

related to government’s role inthe economy using the followingterms: private goods, publicgoods, externality, antitrust law,merger, natural monopoly, recall.

Reviewing Main Ideas2. Explain What does the Sherman

Antitrust Act ban?3. Identify What government

agency deals with problemsrelated to false advertising?

Critical Thinking4. Making Generalizations Should

all monopolies be banned? Whyor why not? Explain.

5. Comparing On a diagram likethe one below, give an exampleof a negative externality and apositive externality of having anairport built near your home.

Analyzing Visuals6. Interpret Study the chart on

page 504. Which agency mightconduct tests on the safety of anew drug? Which agency mightyou contact if you have ques-tions about the regulation ofcable television?

SECTION ASSESSMENT

This is why so many public services such asgas, electricity, and water are delivered by asingle producer.

Advertising and Product LabelsGovernment is also involved when it

comes to truth in advertising and productlabeling information. For example, some sell-ers may be tempted to give misleading infor-mation about a product in order to sell it.

Even the content of food labels isimportant because some people are allergicto certain products like eggs, milk, and

peanuts. Other people, such as diabetics,need to know the contents of food becausethey have to watch their sugar intake.

The Federal Trade Commission dealswith problems of false advertising andproduct claims. The Food and DrugAdministration (FDA) is the agency thatdeals with the purity, effectiveness, andlabeling of food, drugs, and cosmetics.

Product SafetyProduct safety is another important

area of regulation. From time to time, theConsumer Product Safety Commissionrecalls products that pose a safety hazard.In a recall, a company pulls a product offthe market or agrees to change it to make itsafe. In August 2000, Firestone recalledmore than 14.4 million tires that containeda safety-related defect. In 2001, the federalgovernment recalled a variety of products,including a baby crib that fell apart, abrand of sunglasses with a substance thatharmed a person’s skin, and a minivan withdangerous windshield wipers.

Defining What is amerger?

�BE AN ACTIVE CITIZEN�7. Survey Develop several ques-

tions to ask local businesspeo-ple about their experiences withgovernment regulation. Reportyour findings to the class.

Limited Role of GovernmentIn The Wealth of Nations, economist AdamSmith, in 1776, argued against governmentinterference in the marketplace. He said thatindividuals left on their own would work fortheir own self-interest. In doing so, they wouldbe guided as if by an “invisible hand” to usetheir resources efficiently and thus achieve themaximum good for society. Smith’s ideas stillwield considerable influence among manyeconomists and political leaders today.

An airport is builtnear your home.

Positive: Negative:

Study Central TM To review this section, go toand click on Study CentralTM.civ.glencoe.com

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1. What arguments does Somerson use todefend swapping music over the Internet?

2. On what grounds does Stoller object to freefile-sharing services?

3. Work with a group of classmates to draw upa fair-use code for downloading music. Beprepared to defend your guidelines.

Teens listen to music they’vedownloaded from Napster.

Should Consumers Be Able toDownload Internet Music?

Internet music struck a sour note when five major recordcompanies and a group of recording artists chargedNapster with hijacking the music industry. How can awhole industry be hijacked? Napster’s founder, ShawnFanning, invented new software that allows users to copysongs from each other’s computers. The program createsa directory of songs available on the hard drives of otherNapster users, then creates a computer-to-computer linkvia the Internet to transfer the chosen song or songs.

Napster provided the service, not the music. However,every song traded over the Internet belongs to someone.Court battles led Napster to switch from a “for free” to a“for fee” service so songwriters, musicians, and recordingcompanies get paid when their songs are downloaded.However, file sharing is now widely available, both for feeand for free. Should free song sharing be permitted?

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The truth is that Hollywood secretly wants us topay every time we listen to a song or watch amovie. . . . Once I buy a CD I should be able todo any noncommercial thing I want with it. . . .What’s the real difference between swappingCDs with friends and swapping songs with peo-ple who you just met over the Web? Or havingthe Internet make this material availableinstead of the library?

Hollywood . . . fights any technology it thinkswill dilute its profits. They failed with VCRs andMP3 players and Internet radio, and theydeserve to fail here.

—Paul Somerson, staff writer for ZDNET’s Smart Business

Each time a Napster user downloads a copy of asong I have composed, I am deprived of the roy-alty that my work should have earned me. . . .

I fear for the 17-year-old songwriter lookingforward to a career in the music businesstoday. Napster and companies like it are threat-ening not only my retirement, but the future ofmusic itself. In fact, by taking the incentive outof songwriting, Napster may be pushing itselfcloser to a time when there won’t be any songsfor its users to swap.

—Mike Stoller,songwriter


Debating the IssueDebating the Issue

GUIDE TO READING

Main IdeaThe business cycle refersto the ups and downs ineconomic activity.

Key Termsreal GDP, business cycle,expansion, peak,recession, civilian laborforce, unemploymentrate, fiscal policy,inflation, consumer price index (CPI)

Reading StrategyOrganizing InformationAs you read the section,identify at least four waysthat the economy can bemeasured by completinga diagram like the onebelow.

Read to Learn• What is real GDP?• What does the business

cycle illustrate?

Measuring the Economy

SECTION

Measuring the Economy

President Bush meetswith congressionalleaders about the

economy.

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508 Chapter 23 Government and the EconomyAP/Wide World Photos

Much of the work of economistsinvolves predicting how the economy will grow inthe future. However, forecasts are often wrong.Why is this so? A New York Times columnistcontended that “The economy has too manycomplicated moving parts, and despite all thesophisticated forecasting techniques, too littleis known about how the parts interact. . . . Yetthe great majority persist in their optimism,magnifying the positive data and minimizingthe [negative] . . . . And now, optimistic forecastingis swamping a minority view that the currentrecession . . . could endure, dooming theeconomy to contraction or very sluggish growth for months or years.”

Measuring GrowthAs the Americans in Action feature makes clear, the econ-

omy is complex. Another fact becomes clear from this feature.The economy does not perform smoothly at all times.Sometimes it grows, but sometimes it falters. How do econo-mists decide which period the economy is in? How do govern-ment leaders decide what to do about these changes ineconomic performance? In this section, you will learn theanswers to these questions.

One measure of an economy’s performance is whether ornot it is growing. When the economy grows, businesses areproducing more goods and services, and they hire more work-ers. As a result, people have more money and buy more.

The gross domestic product (GDP) is a measure of theeconomy’s output. Remember that GDP is the dollar value of allfinal goods and services produced in a country in a year. All thedollars spent on cars, apples, CDs, haircuts, movies, and every-thing else bought and sold in the country go into the GDP.

Even if the country produces the same amount of goodsand services from one year to the next, the gross domesticproduct could go up simply because prices increase. That


would make it seem that the economy wasgrowing even though it really did not. Toavoid being misled in this way, anothermeasure, real GDP, is used. Real GDPshows an economy’s production after thedistortions of price increases have beenremoved. This eliminates the false impres-sion that output has gone up when pricesgo up.

Explaining Why doeconomists use real GDP to chart aneconomy’s production?

Business FluctuationsThe economy tends to grow over time,

but it does not grow at a constant rate.Instead, it goes through alternating periodsof growth and decline that we call the business cycle. The graph on this pagetracks the typical ups and downs in businessactivity. The line on the graph tracks real

GDP. When the line moves upward, realGDP is growing. A downward slope shows adecline in real GDP.

ExpansionsAn economic expansion takes place

when real GDP goes up. It doesn’t matterwhether the economy is growing by a littleor by a lot. As long as the real GDP ishigher from one period to the next, theeconomy is expanding. At some point, realGDP reaches a peak, or the highest pointin an expansion. Then it starts to decline.

Expansions are normally longer thanrecessions. The longest recent expansionlasted from March of 1991 until March of2001, exactly 10 years.

RecessionsA recession takes place when real

GDP goes down for six straight months,although most last longer than that. On the business cycle graph, the recessions

The Business Cycle

ExpansionRecession RecessionExpansion Expansion

Business Cycle

Real GDP

TIME

LEVE

L O

F B

USIN

ESS A

CTI

VITY

The business cycle is marked by alternating phases of recessionand expansion. What happens after real GDP reaches a peak?

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are shown by a colored background.Fortunately, recessions tend to be shorterthan expansions, with the average recessionlasting about one year. Even so, recessionsare painful times. When the economydeclines, many people lose their jobs.

Describing How long dorecessions usually last?

UnemploymentAnother way of measuring the economy

is to look at employment. Economists startby identifying the civilian labor force,which includes all civilians 16 years old orolder who are either working or are lookingfor work. In the United States, about half ofall people belong to the civilian labor force.

The unemployment rate is the per-centage of people in the civilian labor forcewho are not working but are looking forjobs. As the graph on page 511 shows, theunemployment rate tends to rise sharplyduring recessions and then comes downslowly afterward.

Changes in the unemployment rate areimportant in terms of the economy as awhole. A 1 percent drop in the unemploy-ment rate results in a 2 percent rise in totalincome in the economy. In 2005, totalincome in the American economy wasabout $12.2 trillion. As a result, a 1 percentdrop in unemployment would increasetotal income by about $244 billion.

Of course, the personal impact ofunemployment and lost income can betremendous. Some people cut back on lux-uries such as vacations and new cars.Others must cut back on basic needs suchas health care. Some families go deeperinto debt by buying more goods on credit.

Fiscal PolicyTimes of high unemployment create

stress for many people. High unemploymentbecomes a problem that requires some gov-ernment action.When the government doesstep in, it uses fiscal policy, which ischanges in government spending or tax poli-cies. The government might cut taxes, forinstance. It takes this action hoping that withmore money in their pockets people will buymore goods and services. This increased


Hector V. Barreto, Jr.(1961– )“He’s a natural,” said friendswhen the Senate unanimouslyapproved Hector V. Barreto, Jr.,as head of the Small BusinessAssociation (SBA) in 2001. Theson of a Mexican-born fatherand Mexican American mother,Barreto watched his parentsturn a family-run restaurant intoa string of businesses. They

then helped other Latino business owners byfounding the U.S. Hispanic Chamber ofCommerce.

Barreto—a native of Kansas City, Missouri—followed in his parents’ footsteps. Starting as a9-year-old waiter in the family restaurant, hewent on to launch his own California-based busi-nesses. He also served on numerous small-business committees, including the U.S.Hispanic Chamber of Commerce. In 1999,Hispanic Business Magazine added Barreto toits list of “100 Most Influential U.S. Hispanics.”

Today Barreto oversees an agency that pro-motes the growth of small businesses throughloans, disaster insurance, and governmentcontracts. “Small businesses create goodjobs,” explains the SBA chief, “jobs thatenable people to invest for the future, to buyhomes, to build up communities—and toachieve the American dream.”

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demand will convince businesses to hiremore workers, reducing unemployment.Sometimes the government increases spend-ing. By buying more goods and servicesitself, it tries to convince businesses to hiremore workers to boost production.

Unfortunately, political differencesoften prevent the effective use of fiscal pol-icy. Specifically, it is usually difficult toimplement effective fiscal policies whenrecessions are short and political leadershave different ideas about whether to cuttaxes or increase spending.

Cause and Effect Howmight a decrease in taxes raise employment?

Price StabilityAnother important indicator of an econ-

omy’s performance is inflation. This is a sustained increase in the general level of

prices. Inflation hurts the economy because itreduces the purchasing power of money andmay alter the decisions people make.

To keep track of inflation, the govern-ment samples prices every month for about400 products commonly used by con-sumers. The prices of these 400 items makeup the consumer price index (CPI),which is a popular measure of the price level.

Typically, the prices of some items inthe CPI go up every month, and the pricesof others go down. However, the change inthe average level of prices as measured bythe CPI determines the rate of inflation.

Inflation and the Value of MoneySuppose that an ice cream cone that

costs you a dollar doubles in price. Thisprice increase causes the purchasing powerof your dollar to fall because you have touse twice as many dollars to buy the same

Unemployment and the Business Cycle

2001

1999

1997

1995

1993

1991

1989

1987

1985

1983

1981

1979

1977

1975

1973

1971

1969

2

4

6

8

10

12

YEAR

UNEM

PLO

YMEN

T R

ATE

(per

cent

age)

2003

2005

Period of Recession

The unemployment rate is calculated by dividing the number ofunemployed persons by the number of workers in the civilianlabor force. According to this chart, what has happened to theunemployment rate during the last period of recession?

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Dick Locher ©Tribune Media Services, Inc.

Analyzing Visuals The his-tory of the stock marketdemonstrates that periodsof upward movement areoften followed by sharpdrops. How would youanswer the question posed in the caption of this cartoon?

item. Inflation is particularly hard on peo-ple who have fixed incomes—people whoget a pension or other fixed amount ofmoney. Inflation also reduces the value ofmoney in a savings account because it willbuy less after inflation than before.

Prices provide the signals that help indi-viduals and businesses make the economicdecisions that allocate the factors of pro-duction. High rates of inflation distort thisprocess because people begin to speculate,or buy things like land, works of art, orother things they think will go up in value.

When speculation takes the place ofinvestment in capital goods or services suchas education, the economy begins to suffer.Unfortunately, the government itself can dovery little to prevent inflation because infla-tion results from monetary policy decisions.You will read about monetary policy andhow the Federal Reserve System imple-ments monetary policy in the next chapter.

Identifying What is aprolonged rise in the general price level ofgoods and services called?

Stocks and Stock Markets You hear news about the stock market

every day: “The Dow Jones IndustrialAverage rose 2 percent today,” or “Standard& Poor’s announced that the stock marketfell following a rise in interest rates.” Whatdo these statements mean and what do theytell us about the state of the economy?

Why Stock Prices ChangeInvestors normally want to buy stock if

they think they will make money on it.Profits from stock come in two ways—fromdividends or from capital gains. Dividendsare a share of the corporation’s profits thatare distributed to shareholders. A capitalgain occurs when stock can be sold formore than it originally cost to buy.

The price of a company’s stock, likemost other things, is determined by supplyand demand. Factors such as changes insales or profits, rumors of a possibletakeover, or news of a technological break-through can change the demand for a com-pany’s stock and, therefore, its price.

Checking for Understanding1. Key Terms Use each of these

terms in a complete sentencethat will help explain its mean-ing: real GDP, business cycle,civilian labor force, unemploy-ment rate, fiscal policy, inflation,consumer price index (CPI).

Reviewing Main Ideas2. Identify What are the two main

phases of a business cycle?3. Describe What does the con-

sumer price index track?

Critical Thinking4. Analyzing Information How is

the unemployment rate computed?

5. Drawing Conclusions On achart like the one below, evalu-ate how a sharp increase ininflation might affect these individuals.

Analyzing Visuals6. Describe Study the graph show-

ing the phases of the businesscycle on page 509. How are therecessionary periods in thisgraph illustrated?

SECTION ASSESSMENT

Stock Market IndexesBecause most investors are concerned

about the performance of their stocks, theyoften consult stock indexes—statisticalmeasures that track stock prices over time.The Dow-Jones Industrial Average (DJIA)and Standard and Poor’s (S&P) are the twomost popular indexes. The DJIA tracksprices of 30 representative stocks, and theS&P 500 index tracks the prices of 500stocks. Both measures give us an idea of thewell-being of the stock market as a whole.

Stock Exchanges Stocks in publicly traded companies are

bought and sold at a stock market, or a stockexchange, a specific location where sharesof stock are bought and sold. The exchangemakes buying and selling easy, but you don'thave to actually travel to a stock exchange inorder to buy or sell stock. Instead, you cancall a stockbroker, who can buy or sell thestocks for you.

The first stock exchanges started in parts of Western Europe, then spread to other parts of the world. Most stocks in the United States are traded on the NewYork Stock Exchange (NYSE), the Amer-ican Stock Exchange, or an electronic

stock market likethe NASDAQ.TheNYSE, located onWall Street in NewYork City, is theoldest, largest, andmost prestigious.Stock exchangescan also be foundin Sydney, Tokyo, Singapore, Moscow, andmost other major cities. Computer technol-ogy and electronic trading make it possiblefor investors to trade major stocks aroundthe clock, anywhere in the world.

The Stock Market and the EconomyIndexes like the DJIA and the S&P 500

do more than tell us about the general levelof stock prices—they reveal investors’expectations about the future. If investorsexpect economic growth to be rapid, profitshigh, and unemployment relatively low,then stock prices tend to rise in what isreferred to as a “bull market.” If investorsare pessimistic, stock prices could fall dras-tically in what is called a “bear market.”

Explaining What aredividends?

�BE AN ACTIVE CITIZEN�7. Analyze Try to analyze what you

think occurs throughout theeconomy during a recession.Make a list of some of thethings that business owners maydo in reaction to a recession.

Student Web Activity Visitciv.glencoe.com and click onStudent Web Activities—Chapter 23 to learn moreabout measuring our economy.

Inflation Rises Effect

A doctor on staff at a large hospital

Retired autoworker on a fixed pension


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Technology

Why Learn This Skill?When you communicate with someone, youuse a certain medium. The most commonmedium you use is your voice, an audiomedium. When you make a formal presenta-tion before the class, however, you may wanta more vivid approach. You could use morethan one medium. In other words, you coulddevelop a multimedia presentation.

Learning the SkillTo develop a multimedia presentation, followthese steps:• Select one or more partners to work with

you. You may need help in preparing andassembling different components.

• Prepare still visuals such as posters. Yourposters may show charts, time lines,tables, drawings, or photographs.

• Make sound recordings. Use an audiorecorder to present speeches, interviews,and such. You might record backgroundmusic and noises such as traffic, machin-ery, or crowds.

• Use a still camera to make slides. Projectthe slides and use them as talking points inyour presentation.

• Create a video with a camcorder. Your video-tape may combine actions, scenes, andsounds related to your report. You mightalso record your whole report on video andplay it as a taped presentation rather than alive one.

Practicing the SkillRead the items numbered 1–4 below. Theyrepresent four events in the experience ofCameron and Celia as they open a new tacorestaurant. Read the multimedia componentslettered a–d. Copy the four events on a sepa-rate sheet of paper. Beside each event, writethe letter of the component you would chooseto illustrate it in a multimedia presentation ofCameron and Celia’s business experience.

Planning stageInfluence of supply and demandOpening of shopAdvertising for new business

a. Video of small number of customersentering shop and enjoying the tacos

b. Photo of crowded taco shop with menushowing increase in prices

c. Poster chart of expected expenditures,receipts, and profits

d. Audiotape of a radio commercial

4321


Making a presentation

Developing Multimedia Presentations

With a partner, plan a multimedia presenta-tion illustrating how the business cycle worksand its effects on businesses and consumers.Then produce one of the media componentsin your plan.

508-514 U7 CH23 S2 CT-860970 11/26/03 4:48 PM Page 514

Applying the Skill

Mark Burnett/Stock Boston

Lawrence Migdale/Stock Boston

GUIDE TO READING

Main IdeaThe number of years youare educated has a directeffect on your income.

Key Termsfood stamps; Women,Infants, and Children(WIC) program; workfare; progressiveincome tax; EarnedIncome Tax Credit(EITC)

Reading StrategyOrganizing InformationAs you read the section,complete a diagram likethe one below by identify-ing three major causes ofincome inequality.

Read to Learn• What are the reasons

for income inequality?• How do antipoverty

programs work?

Government, theEconomy, and You

SECTION

The purposes of governmentin the United States are to protectindividual rights, to promote a stableenvironment for economic activity, and topromote policies that support the generalwell-being of all citizens. To measure itsprogress, government agencies such asthe Census Bureau compile statisticssuch as these: “[Inflation-adjusted]median household income remainedunchanged [in 2003]. [T]he nation’sofficial poverty rate rose from 12.1 percent in 2002 to 12.5 percent in 2003. [T]he ratio of female-to-male earnings . . . was 76 [percent] . . . down from 77 [percent] in 2002.The number of people below the official poverty threshold numbered35.9 million in 2003, or 1.3 million more than in 2002 . . .”

Income InequalityThough the United States is a wealthy country, not all

Americans are personally wealthy. Income levels vary for manyreasons. Some people—such as Tiger Woods, Jennifer Lopez,and Stephen King—have special talents that enable them toearn huge amounts of money. These people are rare, though.Education, family wealth, and discrimination are more com-mon reasons for income differences.

EducationLevel of education has a major impact on a person’s

income. As the chart on page 516 shows, the average incomeof a college graduate—someone with a bachelor’s degree—isnearly twice the average income of a high school graduate.More advanced degrees increase income even more.

Because education contributes so much to income, the fed-eral government tries to encourage people to improve theireducation. This is why there are many programs that encour-age education, from free or subsidized lunches to college grantsand low-interest loans. As you will see in Chapter 25, govern-ments offer financial help to students at both state and privatecolleges and universities.

Median household incomeheld steady in 2003.


IncomeInequality

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WealthSome people are born into wealth.

Having wealthy parents often gives themaccess to excellent colleges. In addition,wealthy parents can set up their children ina business or pass on their own business.

DiscriminationDiscrimination is one of the reasons

some people do not receive higher incomes.Women and members of minority groupsmay not be hired into jobs that pay well, orthey may not receive promotions for whichthey are eligible. The chart on educationand income illustrates that salaries for menare normally higher than those for women.This difference is partly a result of discrim-ination against women.

The government has passed severallaws to reduce discrimination. The EqualPay Act of 1963 requires equal pay for jobsthat require equivalent skills and responsi-bilities. The Civil Rights Act of 1964 bans

discrimination on the basis of gender, race,color, religion, and national origin. TheAmericans with Disabilities Act of 1990extended this protection to people withphysical and mental disabilities. Peoplewho suffer discrimination can use thecourts to enforce these laws.

Explaining What was thegoal of the Civil Rights Act of 1964?

PovertyPeople living in poverty, those who are

at the very bottom of the income scale,receive special attention from government.Poverty is a major problem in America, andit is extremely difficult to solve.

Because of this, a number of differentprograms have been devised to help thosein need. The most effective ones are thosethat have built-in incentives that encouragepeople to go back to work or to improvetheir employment situation.

Education and Income

Less than 9th Grade $25,112 $18,227

9th to 12th Grade(No diploma) 30,656 23,625

High School Graduate(or Equivalency) 39,017 27,525

Some College, No Degree 46,696 33,002

Associate Degree 48,153 34,560

Bachelor’s Degree 71,361 45,778

Master’s Degree 87,099 57,874

Professional Degree 130,764 72,689

Doctoral Degree 104,237 70,302

EDUCATION AVERAGE INCOME FOR:MALES FEMALES

Source: U.S. Bureau of the Census.

There is a strong relationship betweenincome and level of education. Whatare the average incomes for menand for women who have a bache-lor’s degree?

515-521 U7 CH23 S3 CT-860970 11/26/03 9:21 PM Page 516

PhotoDisc

The government uses the poverty guide-lines shown on page 518 to determinewhether someone is eligible for certain programs. These guidelines are revisedannually and are based on conservative esti-mates of how much it costs to buy enoughfood, clothing, and shelter to survive.

For example, the $9,570 annual incomefor a single person in the United Statesworks out to a little more than $26 a day.Today, there are about 36 million peoplewho fall below these income guidelines.

Welfare ProgramsMost welfare programs are federal pro-

grams. The federal food stamp programserves millions of Americans. Food stampsare government coupons that can be used topurchase food. Low-income Americans canobtain a small number of stamps at little orno cost.They can then use them like moneyto buy food at authorized stores. Somestates use electronic debit systems in placeof coupons. These systems track a person’spurchases and account electronically.

Another federal welfare program is theWomen, Infants, and Children (WIC)program. It provides help with nutritionand health care to low-income women,infants, and children up to age 5.

Income AssistanceOther programs pay cash to certain

people. Supplemental Security Income(SSI), for instance, gives payments to blindor disabled people and to persons age 65and older. Temporary Assistance to NeedyFamilies (TANF) is another direct cash pro-gram. TANF makes payments to familieswho need help because a parent is dead, dis-abled, or absent. TANF has incentives thatencourage families to plan for a better lifeand even save while they receive benefits.The number of months that a recipient canreceive benefits is limited. The intent of this

limit is to make sure that people do not relyon the program but look for paying work.

Workfare Programs Workfare is a term used to describe

programs that require welfare recipients toexchange some of their labor in exchangefor benefits. Most of the programs are runat the state level, and most are designed to

CORBIS/PictureQuest

Minor’s Contract Dean, 16, a drummer in a popular local band, goesto a music store which advertises “easy credit” topurchase a set of drums. The drums cost $750. Heoffers to put down $150 and make monthly pay-ments on the remain-ing amount. BecauseDean is only 16, thesalesclerk refuses tolet him make pay-ments on credit.Dean is upset andleaves the store.

If Dean buys anitem on credit, he isentering into a con-tract. A contract is apromise between twoor more people to exchange something of value.The right to enter into a contract is accompanied bythe responsibility to live up to the promise.

Dean is considered a minor because he is under18, which is the age of legal majority (in moststates). Although he can make a contract, unless heis buying a “necessity” he usually cannot be forced tocarry out his promises, and he may refuse to honorthe contract. Dean could ask one of his parents to bea cosigner for the agreement. A cosigner agrees tobe responsible for the debt if the minor cannot. Deanbelieves he can pay for the drums, as he earns about$75 per band engagement.

�BE AN ACTIVE CITIZEN�Role-play a negotiation between Dean and the man-ager of the music store. Brainstorm the key pointsfor Dean in negotiating with the manager.


515-521 U7 CH23 S3 CT-874574 9/29/05 4:49 PM Page 517

teach people the skills they need to suc-ceed in a job. Many states also requiresome form of workfare if families want toreceive TANF benefits. People who arepart of workfare often assist law enforce-ment officials or sanitation and highwaycrews, or they may perform other types ofcommunity service work.

Tax PoliciesAnother way the government helps

poor people is with a progressiveincome tax. That means that the tax rateis lower at lower incomes and higher forhigher incomes. This helps lower-incomepeople by taking a smaller proportion oftheir income in taxes. The federal govern-ment provides additional help for low-income families and individuals. Manyworkers use the federal Earned IncomeTax Credit (EITC), which gives taxcredits and even cash payments to quali-fied workers. This program benefits about20 million working families every year.

Describing How doworkfare programs operate?


Checking for Understanding1. Key Terms Use each of these

terms in a sentence that willhelp explain its meaning: foodstamps, workfare, progressiveincome tax, Earned Income TaxCredit (EITC).

Reviewing Main Ideas2. Identify What law requires equal

pay for jobs that require equiva-lent skills and responsibilities?

3. Describe What doesSupplemental Security Incomeprovide?

Critical Thinking4. Evaluating Which of the

antipoverty programs do youthink is the most effective?Explain your answer.

5. Organizing Information On adiagram like the one below, iden-tify four major programs or poli-cies designed to alleviate theproblem of poverty.

Analyzing Visuals6. Compare Study the chart that

shows education and income onpage 516. How much can youexpect to make per year if youdo not graduate from highschool? If you graduate from col-lege with a bachelor’s degree?

SECTION ASSESSMENT

�BE AN ACTIVE CITIZEN�7. Research Scan a local newspa-

per for a short editorial or articleabout income. Take notes bywriting down the main idea andsupporting facts. Summarize thearticle using only your notes.

Poverty Guidelines, 2005

1 $ 9,570

2 12,830

3 16,090

4 19,350

5 22,610

6 25,870

7 29,130

8 32,390

for each additional person add 3,260

FAMILY SIZE POVERTYGUIDELINES

Source: Federal Register, 2005.

Poverty guidelines help the government deter-mine financial eligibility for certain federal pro-grams. In 2005, what was the dollar measure ofpoverty for a family with 9 members?

Programs toRelieve Poverty


515-521 U7 CH23 S3 CT-874574 9/29/05 4:52 PM Page 518

civ.glencoe.com

Background of the CaseAlexander Hamilton, the nation’s first secretary of theTreasury, urged Congress to pass a law establishinga national bank. With the backing of President GeorgeWashington, Congress did so in 1791. The bank’sfunds were used to build roads, canals, and otherprojects that would help the nation grow. The firstbank lasted until 1811; a second bank was charteredin 1816.

Many citizens withdrew deposits from state banksand reinvested them in the new national bank. Angryover the competition from the national bank, statesworked to weaken it. Some states, includingMaryland, taxed national bank branches operatinginside their boundaries. James McCulloch of theBaltimore branch bank refused to pay the state’s$15,000 tax. Maryland sued him and won in a statecourt. McCulloch appealed to the Supreme Court.

The DecisionThe Court had to decide if the national bank was con-stitutional, even though it was not mentioned in the Constitution. Chief Justice John Marshall

delivered the unanimous decision on March 6, 1819:

There is no phrase . . . [that] excludesincidental or implied powers; and whichrequires that everything granted shall beexpressly and minutely described . . . thestates have no power, by taxation or otherwise. . . to impede the operation of constitutionallaws enacted by Congress.

Marshall based the ruling on Article I, Section 8,which gives Congress powers to “make all laws . . .necessary and proper” for carrying out its duties.

Why It MattersThe Court’s unpopular decision upheld the nationalbank and denied states the power to tax it. The mod-ern Federal Reserve System eventually grew out ofthe national bank concept.

The case established the implied powers doctrine,which meant Congress had, under the “necessaryand proper” clause, a wide range of powers to carryout the powers that the Constitution expressly gave it.McCulloch v. Maryland also established the principleof national supremacy, which forbids the states fromintruding into the constitutional operations of thenational government.

1. How did Marshall justify the McCullochdecision?

2. Do you think the decision affectedthe ways Americans viewed ourfederal system?

McCulloch v. MarylandMcCulloch v. Maryland

The First Bank of the United States inPhiladelphia

How did the national government expand itsfinancial powers to meet the needs of agrowing nation?

515-521 U7 CH23 S3 CT-860970 11/26/03 5:10 PM Page 519

519CORBIS

Reviewing Key TermsWrite the key term that matches each definitionbelow.

1. the joining of two corporations

2. a tax rate that is lower for lower incomes andhigher for higher incomes

3. provides federal tax credits to low-incomeworkers

4. a law passed to prevent monopolies and promote competition

5. goods and services whose use by one person does not reduce use by another

6. a prolonged increase in the general level of prices

7. the total number of people 16 years old orolder who are either employed or activelyseeking work

8. the federal government’s use of taxation and spending policies that affects overall business activity

9. GDP that has been adjusted for the distor-tions of price changes

Reviewing Main Ideas10. Why do private producers fail to produce

public goods?

11. What is an externality?

12. What antitrust act was used to break upAmerican Telephone and Telegraph?

13. What is a product recall?

14. What is the business cycle?

15. How does inflation affect consumers?

16. What is the relationship between level of education and income?

17. What does the Americans with DisabilitiesAct provide?

18. How are food stamps used?

19. What program provides help for nutrition andhealth care to low-income families?

Section 1• One role of

government is toprovide economicstability.

• Government is able to influenceeconomicconditions inmany areas.

520

Using Your Foldables Study OrganizerForm a group with two other students.Each one of you should take two tothree minutes to answer one of thefollowing questions. What is the role ofthe government in the economy? Howdoes the government measure theeconomy? How does the government’sinvolvement in the economy affect me?

515-521 U7 CH23 S3 CT-860970 11/26/03 5:11 PM Page 520

(t)Reuters NewMedia Inc./CORBIS, (b)Gary Conner/PhotoEdit

Section 2• A business cycle is the repeated rise and

fall of economic activity over time.• Inflation erodes the purchasing power of

the dollar.

Section 3• Education, wealth, and discrimination may

affect income level.

• It is importantthat we assure a minimumstandard of livingfor all Americans,even if they areunable to work.

Critical Thinking20. Organizing Information Use a chart like

the one below to describe the purpose ofthree federal regulatory agencies.

21. Making Generalizations Study the tableshowing the per capita GDP of eight nationsbelow. What generalizations can you drawfrom this information?

22. Making Comparisons What are the funda-mental differences between the goals ofantitrust legislation and the goals of federalgovernment regulatory agencies?

Practicing Skills23. Developing Multimedia Presentations

Plan and create a multimedia presentationon a topic found in the chapter. List three or four major ideas you would like to cover.Then think about how multimedia resourcescould enhance your presentation.

Economics Activity24. Examine the food ads in your local news-

paper for one week. List those food items that are common to each ad. Compare theprices from the different food stores for thecommon items. What is the largest percent-age difference between the highest and lowest prices?

25. Working with a partner, identify five publicgoods or services that you frequently use.For each, explain how you would be affectedif the government did not provide thesethings. Summarize your ideas.

Technology Activity26. The consumer price index (CPI) is the mea-

sure of the change in price over time of aspecific group of goods and services usedby the average household. To find data onthe CPI, go to the Bureau of Labor StatisticsWeb site at www.bls.gov/data. Scroll downto “Prices and Living Conditions,”and clickon the icon for “Most Requested Statistics”next to “CPI—Average Price Data.” Selecttwo products and write a paragraph describ-ing how their prices have changed.

Self-Check Quiz Visit the Civics Today Web site atciv.glencoe.com and click on Self-Check Quizzes—Chapter 23 to prepare for the chapter test.


Agency Purpose

Luxembourg $36,400 Denmark $25,500

United States $36,200 Iceland $24,800

Norway $27,700 Japan $24,900

Switzerland $28,600 Canada $24,800

Standardized Test Practice

Directions: Choose the bestanswer to complete the following

statement.

A period of business recovery wheneconomic activity increases is calledA a recession.B real GDP.C the business cycle.D an expansion.

Test-Taking TipThis question requires you to understand

what it means when economic activityincreases. Which answer fits best with

this information?

515-521 U7 CH23 S3 CT-874574 9/30/05 2:09 PM Page 521

http://civ.glencoe.comhttp://www.bls.gov/data

Civics Today: Citizenship, Economics, & YouTable of ContentsPreviewing Your TextbookScavenger HuntNational Geographic Reference AtlasUnited States: PoliticalWorld: PoliticalUnited States 2000 Congressional Reapportionment

Reading Skills HandbookIdentifying Words and Building VocabularyReading for a ReasonUnderstanding What You ReadThinking About Your ReadingUnderstanding Text StructureReading for Research

Be an Active ReaderBe an Active CitizenWhy Study Civics?Unit 1: Foundations of American CitizenshipChapter 1: Citizenship and Government in a DemocracySection 1: Government of the People, by the People, for the PeopleSection 2: The Path to CitizenshipSection 3: The Diversity of AmericansChapter 1 Assessment & Activities

Chapter 2: Roots of American DemocracySection 1: Our English HeritageSection 2: The Birth of a Democratic NationSection 3: The Nation's First GovernmentsThe Declaration of IndependenceChapter 2 Assessment & Activities

Chapter 3: The ConstitutionSection 1: The Road to the ConstitutionSection 2: Creating and Ratifying the ConstitutionThe Constitution of the United StatesSection 3: The Structure of the ConstitutionSection 4: Principles Underlying the ConstitutionChapter 3 Assessment & Activities

Chapter 4: The Bill of RightsSection 1: The First AmendmentSection 2: Other Guarantees in the Bill of RightsSection 3: Extending the Bill of RightsSection 4: The Civil Rights StruggleChapter 4 Assessment & Activities

Chapter 5: The Citizen and the CommunitySection 1: The Duties and Responsibilities of CitizenshipSection 2: Volunteering in Your CommunityChapter 5 Assessment & Activities

Unit 2: The National GovernmentChapter 6: CongressSection 1: How Congress Is OrganizedSection 2: The Powers of CongressSection 3: Representing the PeopleSection 4: How a Bill Becomes a LawChapter 6 Assessment & Activities

Chapter 7: The President and the Executive BranchSection 1: The President and Vice PresidentSection 2: The President's JobSection 3: Making Foreign PolicySection 4: Presidential Advisers and Executive AgenciesChapter 7 Assessment & Activities

Chapter 8: The Judicial BranchSection 1: The Federal Court SystemSection 2: How Federal Courts Are OrganizedSection 3: The United States Supreme CourtSection 4: Deciding Cases at the Supreme CourtChapter 8 Assessment & Activities

Unit 3: Political Parties and Interest GroupsChapter 9: Political Parties and PoliticsSection 1: Development of American Political PartiesSection 2: Organization of American Political PartiesSection 3: Role of Political Parties TodayChapter 9 Assessment & Activities

Chapter 10: Voting and ElectionsSection 1: Who Can Vote?Section 2: Election CampaignsSection 3: Paying for Election CampaignsChapter 10 Assessment & Activities

Chapter 11: Influencing GovernmentSection 1: Public OpinionSection 2: The Mass MediaSection 3: Interest GroupsChapter 11 Assessment & Activities

Unit 4: State and Local GovernmentChapter 12: State GovernmentSection 1: The Federal SystemSection 2: The State Legislative BranchSection 3: The State Executive BranchSection 4: The State Judicial BranchChapter 12 Assessment & Activities

Chapter 13: Local GovernmentSection 1: City GovernmentSection 2: County GovernmentsSection 3: Towns, Townships, and VillagesChapter 13 Assessment & Activities

Chapter 14: Dealing With Community IssuesSection 1: How a Community Handles IssuesSection 2: Education and Social IssuesSection 3: Environmental IssuesChapter 14 Assessment & Activities

Unit 5: The Individual, the Law, and the InternetChapter 15: Legal Rights and ResponsibilitiesSection 1: The Sources of Our LawsSection 2: Types of LawsSection 3: The American Legal SystemChapter 15 Assessment & Activities

Chapter 16: Civil and Criminal LawSection 1: Civil CasesSection 2: Criminal CasesSection 3: Young People and the CourtsChapter 16 Assessment & Activities

Chapter 17: Citizenship and the InternetSection 1: Civic ParticipationSection 2: Challenges for DemocracySection 3: Regulating the InternetChapter 17 Assessment & Activities

Unit 6: The Economy and the IndividualChapter 18: What Is Economics?Section 1: The Fundamental Economic ProblemSection 2: Making Economic DecisionsSection 3: Being an Economically Smart CitizenChapter 18 Assessment & Activities

Chapter 19: The American EconomySection 1: Economic ResourcesSection 2: Economic Activity and ProductivitySection 3: Capitalism and Free EnterpriseSection 4: The Economy and YouChapter 19 Assessment & Activities

Chapter 20: DemandSection 1: What Is Demand?Section 2: Factors Affecting DemandChapter 20 Assessment & Activities

Chapter 21: SupplySection 1: What Is Supply?Section 2: Factors Affecting SupplySection 3: Markets and PricesChapter 21 Assessment & Activities

Chapter 22: Business and LaborSection 1: Types of BusinessesSection 2: Labor UnionsSection 3: Businesses in Our EconomyChapter 22 Assessment & Activities

Unit 7: The Free Enterprise SystemChapter 23: Government and the EconomySection 1: The Role of GovernmentSection 2: Measuring the EconomySection 3: Government, the Economy, and YouChapter 23 Assessment & Activities

Chapter 24: Money and BankingSection 1: What Is Money?Section 2: The Federal Reserve SystemSection 3: How Banks OperateChapter 24 Assessment & Activities

Chapter 25: Government FinancesSection 1: The Federal GovernmentSection 2: State and Local GovernmentsSection 3: Managing the EconomyChapter 25 Assessment & Activities

Unit 8: The United States and the WorldChapter 26: Comparing Economic SystemsSection 1: International Trade and Its BenefitsSection 2: Economic SystemsSection 3: Economies in TransitionChapter 26 Assessment & Activities

Chapter 27: Comparing Systems of GovernmentSection 1: Types of GovernmentSection 2: A Profile of Great BritainSection 3: A Profile of ChinaChapter 27 Assessment & Activities

Chapter 28: An Interdependent WorldSection 1: Global DevelopmentsSection 2: The United NationsSection 3: Democracy and Human RightsChapter 28 Assessment & Activities

AppendixWhat Is an Appendix and How Do I Use One?Honoring AmericaCareers HandbookGovernment and Economics Data BankUnited States FactsPresidents of the United StatesDocuments of American HistorySupreme Court Case SummariesGlossarySpanish GlossaryIndexAcknowledgments

Feature ContentsTIMETIME Political CartoonsTIME Teens in ActionTIME An Inside Look At...

Fact Fiction FolkloreStreet Law™: The Law and YouAmerican BiographiesSkillbuilderCritical ThinkingCitizenshipTechnology

Issues to DebateEconomics and YouDocuments of American HistoryLandmark Supreme Court Case StudiesCharts, Graphs, and MapsCharts and GraphsMaps

Student WorkbooksActive Reading Note-Taking Guide - Student EditionChapter 1: Citizenship and Government in a DemocracySection 1: Government of the People, by the People, for the PeopleSection 2: The Path to CitizenshipSection 3: The Diversity of Americans

Chapter 2: Roots of American DemocracySection 1: Our English HeritageSection 2: The Birth of a Democratic NationSection 3: The Nation's First Governments

Chapter 3: The ConstitutionSection 1: The Road to the ConstitutionSection 2: Creating and Ratifying the ConstitutionSection 3: The Structure of the ConstitutionSection 4: Principles Underlying the Constitution

Chapter 4: The Bill of RightsSection 1: The First AmendmentSection 2: Other Guarantees in the Bill of RightsSection 3: Extending the Bill of RightsSection 4: The Civil Rights Struggle

Chapter 5: The Citizen and the CommunitySection 1: The Duties and Responsibilities of CitizenshipSection 2: Volunteering in Your Community

Chapter 6: CongressSection 1: How Congress Is OrganizedSection 2: The Powers of CongressSection 3: Representing the PeopleSection 4: How a Bill Becomes a Law

Chapter 7: The President and the Executive BranchSection 1: The President and Vice PresidentSection 2: The President's JobSection 3: Making Foreign PolicySection 4: Presidential Advisers and Executive Agencies

Chapter 8: The Judicial BranchSection 1: The Federal Court SystemSection 2: How Federal Courts Are OrganizedSection 3: The United States Supreme CourtSection 4: Deciding Cases at the Supreme Court

Chapter 9: Political Parties and PoliticsSection 1: Development of American Political PartiesSection 2: Organization of American Political PartiesSection 3: Role of Political Parties Today

Chapter 10: Voting and ElectionsSection 1: Who Can Vote?Section 2: Election CampaignsSection 3: Paying for Election Campaigns

Chapter 11: Influencing GovernmentSection 1: Public OpinionSection 2: The Mass MediaSection 3: Interest Groups

Chapter 12: State GovernmentSection 1: The Federal SystemSection 2: The State Legislative BranchSection 3: The State Executive BranchSection 4: The State Judicial Branch

Chapter 13: Local GovernmentSection 1: City GovernmentSection 2: County GovernmentsSection 3: Towns, Townships, and Villages

Chapter 14: Dealing With Community IssuesSection 1: How a Community Handles IssuesSection 2: Education and Social IssuesSection 3: Environmental Issues

Chapter 15: Legal Rights and ResponsibilitiesSection 1: The Sources of Our LawsSection 2: Types of LawsSection 3: The American Legal System

Chapter 16: Civil and Criminal LawSection 1: Civil CasesSection 2: Criminal CasesSection 3: Young People and the Courts

Chapter 17: Citizenship and the InternetSection 1: Civic ParticipationSection 2: Challenges for DemocracySection 3: Regulating the Internet

Chapter 18: What Is Economics?Section 1: The Fundamental Economic ProblemSection 2: Making Economic DecisionsSection 3: Being an Economically Smart Citizen

Chapter 19: The American EconomySection 1: Economic ResourcesSection 2: Economic Activity and ProductivitySection 3: Capitalism and Free EnterpriseSection 4: The Economy and You

Chapter 20: DemandSection 1: What Is Demand?Section 2: Factors Affecting Demand

Chapter 21: SupplySection 1: What Is Supply?Section 2: Factors Affecting SupplySection 3: Markets and Prices

Chapter 22: Business and LaborSection 1: Types of BusinessesSection 2: Labor UnionsSection 3: Businesses in Our Economy

Chapter 23: Government and the EconomySection 1: The Role of GovernmentSection 2: Measuring the EconomySection 3: Government, the Economy, and You

Chapter 24: Money and BankingSection 1: What Is Money?Section 2: The Federal Reserve SystemSection 3: How Banks Operate

Chapter 25: Government FinancesSection 1: The Federal GovernmentSection 2: State and Local GovernmentsSection 3: Managing the Economy

Chapter 26: Comparing Economic SystemsSection 1: International Trade and Its BenefitsSection 2: Economic SystemsSection 3: Economies in Transition

Chapter 27: Comparing Systems of GovernmentSection 1: Types of GovernmentSection 2: A Profile of Great BritainSection 3: A Profile of China

Chapter 28: An Interdependent WorldSection 1: Global DevelopmentsSection 2: The United NationsSection 3: Democracy and Human Rights

Haitian Creole SummariesChapit 1: Sitwayènte ak Gouvènman nan yon DemokrasiChapit 2: Rasin Demokrasi Ameriken anChapit 3: Konstitisyon anChapit 4: "Bill of Rights" laChapit 5: Sitwayen an ak Kominote aChapit 6: Kongrè aChapit 7: Prezidan an ak Branch Egzekitif laChapit 8: Branch Jidisyè aChapit 9: Pati Politik ak PolitikChapit 10: Vòt ak EleksyonChapit 11: Enfliyans Gouvènman anChapit 12: Gouvènman Deta aChapit 13: Gouvènman LokalChapit 14: Okipe Pwoblèm Kominote aChapit 15: Dwa ak Responsabilite devan LalwaChapit 16: Lwa Sivil ak KriminèlChapit 17: Sitwayènte ak Entènet laChapit 18: Ki sa yo rele Syans Ekonomik?Chapit 19: Ekonomi Ameriken anChapit 20: DemannChapit 21: Of laChapit 22: Biznis ak TravayChapit 23: Gouvènman an ak Ekonomi anChapit 24: Lajan ak Operasyon BankèChapit 25: Finans GouvènmanChapit 26: Konpare Plizyè Sistèm EkonomikChapit 27: Konpare Plizyè Sistèm GouvènmanChapit 28: Yon Monn Entèdepandan

Reading Essentials and Study Guide - Student EditionChapter 1: Citizenship and Government in a DemocracySection 1: Government of the People, by the People, for the PeopleSection 2: The Path to CitizenshipSection 3: The Diversity of Americans

Chapter 2: Roots of American DemocracySection 1: Our English HeritageSection 2: The Birth of a Democratic NationSection 3: The Nation's First Governments

Chapter 3: The ConstitutionSection 1: The Road to the ConstitutionSection 2: Creating and Ratifying the ConstitutionSection 3: The Structure of the ConstitutionSection 4: Principles Underlying the Constitution

Chapter 4: The Bill of RightsSection 1: The First AmendmentSection 2: Other Guarantees in the Bill of RightsSection 3: Extending the Bill of RightsSection 4: The Civil Rights Struggle

Chapter 5: The Citizen and the CommunitySection 1: The Duties and Responsibilities of CitizenshipSection 2: Volunteering in Your Community

Chapter 6: CongressSection 1: How Congress Is OrganizedSection 2: The Powers of CongressSection 3: Representing the PeopleSection 4: How a Bill Becomes a Law

Chapter 7: The President and the Executive BranchSection 1: The President and Vice PresidentSection 2: The President's JobSection 3: Making Foreign PolicySection 4: Presidential Advisers and Executive Agencies

Chapter 8: The Judicial BranchSection 1: The Federal Court SystemSection 2: How Federal Courts Are OrganizedSection 3: The United States Supreme CourtSection 4: Deciding Cases at the Supreme Court

Chapter 9: Political Parties and PoliticsSection 1: Development of American Political PartiesSection 2: Organization of American Political PartiesSection 3: Role of Political Parties Today

Chapter 10: Voting and ElectionsSection 1: Who Can Vote?Section 2: Election CampaignsSection 3: Paying for Election Campaigns

Chapter 11: Influencing GovernmentSection 1: Public OpinionSection 2: The Mass MediaSection 3: Interest Groups

Chapter 12: State GovernmentSection 1: The Federal SystemSection 2: The State Legislative BranchSection 3: The State Executive BranchSection 4: The State Judicial Branch

Chapter 13: Local GovernmentSection 1: City GovernmentSection 2: County GovernmentsSection 3: Towns, Townships, and Villages

Chapter 14: Dealing With Community IssuesSection 1: How a Community Handles IssuesSection 2: Education and Social IssuesSection 3: Environmental Issues

Chapter 15: Legal Rights and ResponsibilitiesSection 1: The Sources of Our LawsSection 2: Types of LawsSection 3: The American Legal System

Chapter 16: Civil and Criminal LawSection 1: Civil CasesSection 2: Criminal CasesSection 3: Young People and the Courts

Chapter 17: Citizenship and the InternetSection 1: Civic ParticipationSection 2: Challenges for DemocracySection 3: Regulating the Internet

Chapter 18: What Is Economics?Section 1: The Fundamental Economic ProblemSection 2: Making Economic DecisionsSection 3: Being an Economically Smart Citizen

Chapter 19: The American EconomySection 1: Economic ResourcesSection 2: Economic Activity and ProductivitySection 3: Capitalism and Free EnterpriseSection 4: The Economy and You

Chapter 20: DemandSection 1: What Is Demand?Section 2: Factors Affecting Demand

Chapter 21: SupplySection 1: What Is Supply?Section 2: Factors Affecting SupplySection 3: Markets and Prices

Chapter 22: Business and LaborSection 1: Types of BusinessesSection 2: Labor UnionsSection 3: Businesses in Our Economy

Chapter 23: Government and the EconomySection 1: The Role of GovernmentSection 2: Measuring the EconomySection 3: Government, the Economy, and You

Chapter 24: Money and BankingSection 1: What Is Money?Section 2: The Federal Reserve SystemSection 3: How Banks Operate

Chapter 25: Government FinancesSection 1: The Federal GovernmentSection 2: State and Local GovernmentsSection 3: Managing the Economy

Chapter 26: Comparing Economic SystemsSection 1: International Trade and Its BenefitsSection 2: Economic SystemsSection 3: Economies in Transition

Chapter 27: Comparing Systems of GovernmentSection 1: Types of GovernmentSection 2: A Profile of Great BritainSection 3: A Profile of China

Chapter 28: An Interdependent WorldSection 1: Global DevelopmentsSection 2: The United NationsSection 3: Democracy and Human Rights

Spanish Reading Essentials and Study Guide - Student EditionCapítulo 1: La ciudadanía y el gobierno en una democraciaSección 1: Gobierno del pueblo, por el pueblo y para el puebloSección 2: El camino a la ciudadaníaSección 3: La diversidad de los estadounidenses

Capítulo 2: Las raíces de la democracia estadounidensesSección 1: Nuestra herencia inglesaSección 2: El nacimiento de una nación democráticaSección 3: Los primeros gobiernos de la nación

Capítulo 3: La ConstituciónSección 1: El camino a la ConstituciónSección 2: La creación y la ratificación de la ConstituciónSección 3: La estructura de la ConstituciónSección 4: Los principios de la Constitución

Capítulo 4: La Declaración de DerechosSección 1: La Primera EnmiendaSección 2: Otras garantías de la Declaración de DerechosSección 3: Ampliación de la Declaración de DerechosSección 4: La lucha por los derechos civiles

Capítulo 5: El ciudadano y la comunidadSección 1: Los deberes y las responsabilidades de la ciudadaníaSección 2: El trabajo voluntario en tu comunidad

Capítulo 6: El gobierno nacionalSección 1: Cómo está organizado el CongresoSección 2: Las facultades del CongresoSección 3: La representación del puebloSección 4: Cómo se convierte en ley un proyecto legislativo

Capítulo 7: El presidente y el poder ejecutivoSección 1: El presidente y el vicepresidenteSección 2: El trabajo del presidenteSección 3: La política exteriorSección 4: Los consejeros presidenciales y las dependencias del ejecutivo

Capítulo 8: El poder judicialSección 1: El sistema de tribunales federalesSección 2: Cómo están organizados los tribunales federalesSección 3: La Corte Suprema de Estados UnidosSección 4: Cómo se deciden los casos en la Corte Suprema

Capítulo 9: Los partidos políticos y la políticaSección 1: Surgimiento de los partidos políticos estadounidensesSección 2: Organización de los partidos políticos estadounidensesSección 3: Función de los partidos políticos en la actualidad

Capítulo 10: Votación y eleccionesSección 1: ¿Quién puede votar?Sección 2: Campañas electoralesSección 3: Cómo se pagan las campañas electorales

Capítulo 11: Influencias del gobiernoSección 1: La opinión públicaSección 2: Los medios de comunicaciónSección 3: Los grupos de presión

Capítulo 12: El gobierno estatalSección 1: El sistema federalSección 2: El poder legislativo estatalSección 3: El poder ejecutivo estatalSección 4: El poder judicial estatal

Capítulo 13: Gobierno localSección 1: El gobierno municipalSección 2: Gobiernos condalesSección 3: Pueblos, municipios y poblaciones

Capítulo 14: Soluciones para las comunidadesSección 1: Cómo maneja sus asuntos una comunidadSección 2: Asuntos educativos y socialesSección 3: Asuntos ambientales

Capítulo 15: Derechos y responsabilidades legalesSección 1: El origen de nuestras leyesSección 2: Clases de derechoSección 3: El sistema legal estadounidense

Capítulo 16: Derecho civil y penalSección 1: Casos civilesSección 2: Casos penalesSección 3: Los menores de edad y los tribunales

Capítulo 17: La ciudadanía y la InternetSección 1: La participación cívicaSección 2: Retos de la democraciaSection 3: Regulación de internet

Capítulo 18: La economía y el individuoSección 1: El problema económico fundamentalSección 2: Las decisiones económicasSección 3: Cómo ser un ciudadano que sabe economía

Capítulo 19: La economía estadounidenseSección 1: Recursos económicosSección 2: Actividad económica y productividadSección 3: Capitalismo y libre empresaSección 4: La economía y tú

Capítulo 20: La demandaSección 1: Qué es la demandaSección 2: Factores que influyen en la demanda

Capítulo 21: OfertaSección 1: Qué es la ofertaSección 2: Factores que influyen en la ofertaSección 3: Mercados y precios

Capítulo 22: Empresas y TrabajadoresSección 1: Clases de empresasSección 2: Sindicatos de trabajadoresSección 3: Las empresas en nuestra economía

Capítulo 23: El gobierno y la economíaSección 1: El papel del gobiernoSección 2: Cómo se mide la economíaSección 3: El gobierno, la economía y tú

Capítulo 24: El dinero y los bancosSección 1: Qué es el dineroSección 2: El sistema de la Reserva FederalSección 3: Cómo funcionan los bancos

Capítulo 25: Finanzas del gobiernoSección 1: El gobierno federalSección 2: Gobiernos estatales y localesSección 3: El manejo de la economía

Capítulo 26: Comparación de sistemas económicosSección 1: El comercio internacional y sus ventajasSección 2: Sistemas económicosSección 3: Economías en transición

Capítulo 27: Comparación de sistemas de gobiernoSección 1: Clases de gobiernoSección 2: Un perfil de Gran BretañaSección 3: Un perfil de China

Capítulo 28: Un mundo interdependienteSección 1: Acontecimientos mundialesSección 2: La Organización de las Naciones UnidasSección 3: Democracia y derechos humanos

Spanish SummariesCapítulo 1: La ciudadanía y el gobierno en una democraciaCapítulo 2: Las raíces de la democracia estadounidensesCapítulo 3: La ConstituciónCapítulo 4: La Declaración de DerechosCapítulo 5: El ciudadano y la comunidadCapítulo 6: El gobierno nacionalCapítulo 7: El presidente y el poder ejecutivoCapítulo 8: El poder judicialCapítulo 9: Los partidos políticos y la políticaCapítulo 10: Votación y eleccionesCapítulo 11: Influencias del gobiernoCapítulo 12: El gobierno estatalCapítulo 13: Gobierno localCapítulo 14: Soluciones para las comunidadesCapítulo 15: Derechos y responsabilidades legalesCapítulo 16: Derecho civil y penalCapítulo 17: La ciudadanía y la InternetCapítulo 18: La economía y el individuoCapítulo 19: La economía estadounidenseCapítulo 20: La demandaCapítulo 21: OfertaCapítulo 22: Empresas y TrabajadoresCapítulo 23: El gobierno y la economíaCapítulo 24: El dinero y los bancosCapítulo 25: Finanzas del gobiernoCapítulo 26: Comparación de sistemas económicosCapítulo 27: Comparación de sistemas de gobiernoCapítulo 28: Un mundo interdependiente

Standardized Test Skills Practice Workbook - Student EditionActivity 1: Interpreting Charts and Tables Activity 2: Using Time LinesActivity 3: Interpreting Diagrams Activity 4: Identifying the Main Idea Activity 5: Interpreting a Visual Image Activity 6: Using a Bar Graph to Interpret Data Activity 7: Interpreting Graphs Activity 8: Interpreting Primary Sources Activity 9: Comparing and Contrasting Activity 10: Making Inferences Activity 11: Interpreting a Political Cartoon Activity 12: Persuasive Writing About an Issue Activity 13: Recognizing Point of View Activity 14: Forming Hypotheses Activity 15: Perceiving Cause-and-Effect RelationshipsActivity 16: Distinguishing Between Fact and NonfactActivity 17: Evaluating a Web SiteActivity 18: Making Decisions Activity 19: Predicting Outcomes Activity 20: Classifying Facts and DetailsActivity 21: Analyzing Graphs and TablesActivity 22: Constructing Bar Graphs to Analyze DataActivity 23: Interpreting and Evaluating EditorialsActivity 24: Outlining Information for WritingActivity 25: Analyzing Statistics to Draw ConclusionsActivity 26: Making Generalizations Activity 27: Recognizing Forms of Propaganda Activity 28: Reading a Special-Purpose Map

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