Civics and Economic Study Guides

							              GUIDE TO THE EOC FOR CIVICS AND ECONOMICS

Goal #1 Foundations of the American Political System

1.01 1.04 Pre-Revolutionary America

The British North American Colonies were divided into the
Northern, Middle, and Southern colonies.
Jamestown, Virginia, the first successful English colony, was
founded in 1607. Most of the colonies were founded by religious
dissenters. Those dissatisfied with the Church of England were
called Pilgrims. They were followed by others called Puritans, who
wanted to build communities based on strong biblical teachings.
And, Catholics founded the colony of Maryland. Most colonies
tolerated different religious groups. Roger Williams, a Puritan
dissenter, left Massachusetts and started the colony of Rhode
Island. Quakers who professed non-violence and got along with the
Indians were led by William Penn who founded Pennsylvania.
While many colonists came to America to escape religious
persecution, they did not practice religious tolerance and dissenters
where forced to endure the Salem Witch Trials.
Northern colonies became centers for trade and manufacturing
while the South relied on agriculture. Land ownership in the South
was restricted to a few wealthy families who owned large
plantations. Many workers in the colonies were indentured servants
that had come to America by agreeing to work for a period of time
to pay back those that had loaned them money for the passage.
Slaves began to arrive (mostly in the South) in the 1620s and
worked on plantations. These slaves were the property of their
owners and by the 1680s the slave trade was thriving. That trade
was called the Triangular Trade Route - Europe, Africa, and North
America. The captured Africans were crammed onto ships for the
Middle Passage.
The colonies existed under an economic system called
mercantilism, countries should export more than they import in
order to make money. Colonies came in 4 types: joint-stock where
investors paid shares for a chance to make a profit in the new
colony, proprietary where one person owns the colony, royal where
the king retains ownership and hires a governor to run things, and
self-governing where the people were allowed to run it themselves.
Virginia was the best known self-governing: run by the elected
House of Burgesses.
In New England, land owning males held town meetings to vote on
all matters. This was truly government by the consent of the
governed. In the colony of Massachusetts Bay only church
members had suffrage, could vote. Women and blacks could not
vote in this period.
Religion was the dominant part of people’s lives. In the mid-1700s
the First Great Awakening swept the colonies with religious leaders
promoting a spiritual and moral rebirth. Nationalism, a loyalty to the
country, started to take hold in the colonies. In 1676, Nathaniel
Bacon, a Virginia planter clashed with the governor, led a rebellion
against the crown by burning Jamestown. This rebellion showed
that average colonist wanted some control of their government and
became the forerunner of the Revolution.

1.02, 1.03 The American Revolution
The Greeks practiced democracy, people rule. And, the Romans
founded a republic where the people elect representatives to vote
for them.
The Magna Carta limited the power of the King by granting some
power to the nobles in 1215. English Common Law was
based on customs and court decisions (precedents). In 1689,
Parliament passed the British Bill of Rights which announced that
people have certain rights just for being people.
Social Contract says that the power of government comes from the
governed. The Pilgrims founded the Plymouth colony in 1620
based on the Mayflower Compact. This was followed by the
Fundamental Orders of Connecticut that said the power of the
government came only from the “free consent of the governed”.
Virginia’s House of Burgesses became the first representative body
in the New World.
In New England, town meetings were the first form of direct
democracy. A republic is a political system where the supreme
power rests with the citizens. The founding fathers believed in
majority rule, civil liberties, and limited government.
In the 1600s, the Brits passed the Navigation Acts allowing the
colonies to only trade with the mother country. From the
Navigation Acts until the mid-1700s, the British paid little attention
to the colonies in a period known as Salutary Neglect.
During this time the colonies enjoyed self government.
Between 1754 and 1763, the Brits and the French fought the
French and Indian War. In 1754, the Albany Plan of Union was
proposed by Ben Franklin. He suggested that the colonies unite for
protection against the Indians. The colonies were then taxed to pay
for the war. Salutary neglect was over. In the Proclamation of 1763,
England prohibited the colonists from settling west of the
Appalachian Mountains. Writs of Assistance were passed allowing
the Brits to search people’s homes. Some argued that “taxation
without representation is tyranny”.
The Stamp Act was passed in 1765 placing a tax on all materials
printed on paper. The colonists were enraged. A group
known as the Sons of Liberty formed to oppose the Crown. A
Stamp Act Congress met to oppose the new law and petitioned the
king. Parliament disagreed with the Stamp Act Congress by
passing the Declaratory Act which said that the Brits could tax the
colonies without consulting them. The Quartering Act required
colonists to provide housing for British soldiers.
In 1773, the Boston Tea Party took place dumping British tea into
Boston Harbor. The Brits responded by passing the
Intolerable Acts further punishing the colonies. These acts moved
the colonists closer to rebellion. Thomas Paine argued for
independence in Common Sense. In 1776, the Second
Continental Congress passed the Declaration of Independence as
written by Thomas Jefferson declaring that the colonies had
become an independent country.

1.05 The Articles of Confederation
The first national congress was established, but was too weak to
handle the problems of the country:
couldn’t regulate commerce, couldn’t collect taxes, or raise an
army. The Articles did some good:
ratified the treaty ending the war and the Northwest Ordinance that
provided for westward expansion.
How could we create a stronger national government? The New
Jersey Plan: 3 branches of government including a congress based
on equal representation for the states. The Virginia Plan: 3
branches with a congress based on proportional representation (the
number of representatives based on population).
Neither plan was adopted. Delegates met in Philadelphia to find a
solution. The solution was the Great Compromise, also
known as the Connecticut Compromise, which provided for 2
houses. One based on population (House) and the other based on
equal representation (Senate). The 3/5 Compromise allowed for
slaves to be counted as 3/5 of a free person for arriving at a state’s
population. The Bill of Rights was added to protect the individual
freedoms.

1.06, 1.07 Philosophical Foundations
The convention was divided into 2 groups: The Federalists led by
Hamilton that wanted a strong federal government and the Anti-
Federalists led by Jefferson that wanted the states to remain
strong. Hamilton’s group wanted a “loose” interpretation of the
Constitution to allow for greater power for the national government.
Jefferson’s group wanted a “strict” interpretation that would be
restrictive on the national government.
The two groups did compromise in order to create the Constitution.
A government with 3 branches:
legislative, executive, and judicial. Each of these branches would
have “checks and balances” over the other two. The
Constitution was ratified by the states in 1787 and George
Washington was elected president in 1788.
The Bill of Rights guaranteed personal liberties.
#1 Basic freedoms of speech, religion, assembly, petition, and
press
#2 Right to keep and bear arms
#3 No quartering of troops
#4 No unreasonable searches and seizures
#5 Rights of the accused including: due process; no self
incrimination; double jeopardy
#6 Speedy and public trial
#7 Trial by jury.
#8 No excessive bail or unusual punishments
#9 Rights saved for the people
#10 Powers reserved for the states

1.08 American System of Government
Types of government include:
dictatorship – one man rule; anarchy – no government;
totalitarianism – governments holding absolute power;
monarchy – ruled by a king or queen;
limited monarchy – king or queen with a parliament; theocracy –
religious rule;
oligarchy – a government led by a few; aristocracy – led by the
elite class;
democracy – government of the people; republic – a government
from the people;
federalism – a government with the federal government being
stronger than the state or local governments.

Goal #2 Democracy in America
2.01 The Constitution
The American government is described best in the Preamble: form
a more perfect Union, insure domestic tranquility, provide for the
common defense, promote the general welfare, and secure the
blessings of liberty.
The Constitution is based on popular sovereignty (power of the
people) and limited government. There are enumerated powers
given specifically to the federal government and reserved powers
retained by the states. The elastic clause gives Congress the
flexibility to “make all laws necessary and proper” through implied
powers which are not written into the document. Expressed powers
are granted by the Constitution while Delegated powers are
specifically assigned to the federal government. The Supremacy
clause gives the federal government authority over state and local
laws.
The federal government is divided into 3 branches: legislative,
executive, and judicial. Each of the branches exercises checks and
balances on the other two. This system keeps one branch from
overpowering the other two.

2.02, 2.03 The Three Branches
The rule of law implies that authority is in the laws and not in
people.
The Legislative Branch consists of the House and the Senate.
The House consists of 435 representatives that serve 2 year terms.
The Senate consists of 100 senators with 2 from each state elected
to 6 year terms.
The House is presided over by the Speaker of the House as
elected by the majority party. The Vice President serves as
President of the Senate when he is there. Majority and minority
leaders are selected by their respective parties.
The major function of Congress is to introduce bills and turn those
bills into laws. But, bills can be vetoed by the president.
But,…..Congress can override vetoes with a 2/3 majority vote.
Both houses operate under a committee system and a seniority
system which gives power to those that have served the longest.
Bills are introduced by a member….assigned to a committee for
review….if approved in committee moves back to the whole body
for debate….if approved by that body it moves to the other
body….when both bodies approve the bill it goes to the President
for his signature.
Legislators may prevent a bill from coming up for a vote by using
the tactic called “filibuster” where someone talks and talks and talks
delaying a vote on a bill. Filibustering can be stopped by a cloture
vote which requires a 3/5 vote.
Congress has other duties not connected to passing bills.
Impeachment (removing a government official), censure (a vote of
disapproval for misconduct).
The Congress may not make some laws. There can be no laws
interfering with writs of habeas corpus, which says that no one may
be held without due process. There can be no laws issuing a bill of
attainder, where a person is punished without a trial. And Congress
may make no ex post facto laws, laws made after a crime is
committed.

The Executive Branch is headed by the president. The president
has several roles: chief executive of the nation, commander in chief
of the armed forces, head of state and chief diplomat, and leader of
his party. The president delivers the State of the Union address to
Congress each year. He also may issue executive orders that carry
the weight of law.

The Judicial Branch consists of a network of courts headed up by
the nine member Supreme Court.
The Supreme Court: has original jurisdiction in some cases which
means it is the first court to hear a certain type of case, has
appellate jurisdiction to review cases from the lower courts,
concurrent jurisdiction which shares authority with lower courts, and
exclusive jurisdiction which gives authority solely to the Supreme
Court. Judicial review allows the Supreme Court to declare laws
unconstitutional.

2.04 Amending the Constitution
Amendments are additions to the document. There have been 27
amendments over the 217 years.
Any amendment requires congressional action of 2/3 vote, and
approval ¾ of the state legislatures.
The first 10 amendments are the Bill of Rights. Others include: #13
abolishing slavery, #14 granting citizenship to all
Americans, #19 giving women the right to vote, #22 limits the
president to 2 terms, and #25 defining presidential succession.

2.05 Testing the Constitution Through Cases

The Marshall Court….
Marbury vs. Madison…..established the rule of judicial review.
McCullough vs. Maryland…..power of the federal government over
the states.
Gibbons vs. Ogden…..power of the federal government to regulate
commerce.

Cases dealing with race:
Plessy vs. Ferguson…..principle of “separate, but equal”
Brown vs. Board of Education…..overturned Plessy “separate, but
equal is not equal”.
Swann vs. CMS….. busing of students may be used to combat
segregation.
Korematsu vs. US….. due process can be denied in a time of
national emergency.

2.06 Rights of the Individual
The Supreme Court is the highest judicial authority in the land. It is
the final word on all laws.
Cases protecting individual rights:
Texas vs. Johnson…..burning the American flag is protected as
free speech.
Engel vs. Vitale….. prayer in schools was banned.
Gideon vs. Wainright…..the right to legal representation to those
accused of a crime.
Miranda vs. Arizona…..rights at the time of arrest like “right to
remain silent”.
Tinker vs. Des Moines Schools…..students have the right to voice
their opinions.
New Jersey vs. TLO…..students may have reasonable searches of
their bags and lockers.
Bakke vs. California…..reverse discrimination, affirmative action is
OK, but no quotas.

2.07 Federalism Today
Power is divided between the States and the Federal government.
Many argue the role of the states in making and enforcing laws.
There must be “separation of church and state” the government can
not create a religion or prohibit a person from worshipping as
he/she pleases.
The underlying principle of the American system of government is
“majority rules/minority rights”.

2.08, 2.09 Taxation and Government
The government has a national budget which details how the
government will spend its’ money. Revenue is the amount of
money taken in by the government. A balanced budget spends the
same amount it takes in through revenues. Deficit spending occurs
when the government spends more than it brings in. A surplus
occurs when the government brings in more revenue than it
spends.
Most governmental revenues come through income taxes which
takes a percentage of each person’s income. In the USA we have a
progressive income tax which takes a larger percentage out of
earnings as earnings increase. Ie.. the more you make the higher
percentage you pay. The Internal Revenue Service (IRS) collects
the taxes.
Other taxes include: excise taxes paid on consumption of goods
(gasoline, tobacco, phone time) and estate taxes paid from
inheritances (you can’t avoid taxes even in death).
The government spends most of its’ money for defense and
entitlement programs. Crime control expenditures include: the
FBI, the DEA, the ATF (Bureau of Alcohol, Tobacco, and Fire
Arms).
National security expenditures include: the CIA, Department of
Homeland Security, and the Bureau of Immigration and
Naturalization.
Other expenditures include:
Roads through the DOT and NTSB (National Transportation Safety
Board), Center for Disease Control, Medicare, and
Medicaid.

Goal 3 North Carolina Government
3.01 3.02 Government
The NC Constitution may be amended by two methods: majority
vote of the people and by a 3/5 vote in both houses of the General
Assembly. NC confirms “popular sovereignty” government is
subject to the will of the people. NC has limited
government, separation of powers, and checks and balances.
NC’s chief executive is the governor who is elected to a 4 year term
as is the second executive, the lieutenant governor who also acts
as the president of the senate. Other state leaders include
members of the council of state who are all elected and serve 4
year terms.
The legislative branch creates laws (statutes). This General
Assembly is composed of a 50 member Senate and a 120 member
House.

Local governments include: counties run by a board of
commissioners, cities run by a council and mayor (or council and
manager), and townships. School boards are also a local council
designed to run a school district.
Law enforcement: sheriffs (elected) for the counties and chiefs of
police (appointed) for the cities / towns.

3.03 3.04 3.05 Checks and Balances
NC has many state agencies operating under the office of the
governor: Health and Human Services, Transportation, Parks and
Recreation, and more.
Judges decide cases brought before the courts for justice. The
highest court in NC is the Supreme Court. The 2 landmark cases in
NC were: State vs. Mann (1829) ruling that slaves were not people,
but property; and Leandro vs NC (2002) all children in NC are
entitled to a quality education.

3.06 3.07 Authority
NC protects civil rights and voting rights. Municipalities (cities and
towns) may extend their control of land by annexation.
NC must have a balanced budget.
Charter schools are independent and free of state and local
regulations.

3.08 3.09 NC Taxes
Property tax – on value of real estate Corporate income tax – on
business profits
Personal income tax – on people’s earnings Sales tax – on sales of
goods and services
Estate tax – on estates of people who died Excise tax – on
production and sales of certain products
Inheritance tax – on property when it is inherited
NC also gets revenues by: fines, licenses, permits, user fees,
disposal fees, and impact fees.
NC has a budget to measure revenues (income) and expenditures
(spending).
NC spends most of its money on education, but also finances
health and welfare, and the state colleges and universities.
Local agencies provide other services: public transportation, jails,
airports, libraries, roads, water, sewers, and public housing.

Goal 4 Politics
4.01 4.02 4.03 Politics and elections
Political parties are organizations that promote certain ideas and
people. The 3 functions of political parties are:
1. to gather together people with similar values and views
2. to govern in a predictable way
3. to compete in elections.
Parties have platforms that express where the party stands on
various issues. America has a 2 party system: Republicans and
Democrats. There are 3rd parties (minor) that influence elections
from time to time.
Political parties are generally defined by their political views:
The Republican Party is more conservative (small government and
personal freedoms) while the Democratic Party is more liberal
(large government and social programs). Both parties have radical
that want to make big changes, and moderates that change needs
to come from within the government.
Elections may be partisan with both parties having candidates or
non-partisan where the candidates do not list their party
affiliation on the ballot. General elections are for national and state
choices, and primary elections held within the parties to get
candidates for the general election.
Plurality means the winner gets the most votes; a majority means
that the winner must also get more than 50% of the total votes cast.
Prior to and after elections groups take polls that indicate for whom
they intend to vote. These polls are used to help predict the
outcomes of elections. Some polls are conducted done through
canvassing by going door to door, over the phone, or on the
internet.
The election process begins with voter registration in which eligible
voters sign up to vote. Voters go to the polls to vote on
punch cards, computers, or on machines. Votes are tallied and the
candidate with the majority of the votes cast is the winner. (In
presidential elections the candidate with a plurality wins all of the
state electors. The state electors then submit their results to the
Congress to count and declare a winner.

4.04 Political Action
People can voice their opinions on issues by their vote, through
petitions, and through paid lobbyists.
When those methods don’t work then some turn to protests through
marches, demonstrations, boycotts, and civil disobedience.
Public opinions are taken through surveys and polls. Both should
be random in nature to eliminate bias.
Leaders of movements are called activists. In politics there is a lot
of name calling and accusations. Illegal name calling may be in
written form called libel and in spoken form called slander.

4.05 Laws
Law is divided into criminal law (penal law) that punishes criminals
for committing crimes against the state, and civil law that regulates
the relationships between people and between businesses.
Society requires to have laws, so that we will not have anarchy (a
government with no laws). The government is responsible to make
sure that people can live their lives without interference or violence.
In civil cases there is a plaintiff that brings the case. The plaintiff is
looking for damages in terms of money or some other
action.
Civil disobedience involves breaking an unjust law to bring attention
to that matter. (Martin Luther King)
4.06, 4.07 Civic Participation
Citizens are bound together by basic values and principle. Citizens
give up a portion of their liberty to the government in return for
safety and basic rights.
Citizens give their consent to the government by voting. Another
form of participation is through jury duty.
Patriotism is the support and love of one’s country. This may
include fighting in the military if needed.
Americans also volunteer in programs such as the Peace Corps
(helping in poor countries) and Senior Corps (older citizens
working in communities).
4.08 , 10.01, 10.04 Civic Involvement
Citizens have a responsibility to participate in their government.
Citizens have a financial responsibility to pay taxes. Voting is the
number one responsibility of a citizen. Another way to assume
responsibility is through community service (volunteerism).
The difference between personal and civic responsibilities is that
personal responsibilities emphasizes your own welfare while civic
responsibilities express support for society as a whole.
Citizens should exercise certain civic values such as respect and
tolerance, cooperation and compromise, and collaboration.
Legal responsibilities mean simply following the laws. Moral
responsibilities mean looking out for the common good above
self-interest.
4.09, 10.05 Conflict and Resolution
Public issues and problems affect society as a whole. Public issues
and problems may include: taxation, the economy,
unemployment, poverty, aging, acid rain, global warming,
government corruption, crime and punishment, racism, and
education. Apathy is just not caring or having an interest in an
issue.
Conflict is a part of democracy and the resolving of conflicts is at
the heart of democracy. Some disputes go to court for
judgment; other disputes go to arbitration (letting a third party make
the decision) or mediation (a third party helps the two sides come to
a compromise). Negotiation is talking to each other in order to
reach a compromise such as a union and management on a new
contract.
Goal 5 Justice and Society
5.01 , 5.04 Public Debate
A Law is a legal document through which a rule of conduct is
established and enforced. An Act is
A term used for a law, bill, or statute. In a democracy citizens must
resolve conflicts between competing interests. In a
democracy a degree of majority rule usually wins. But, sometimes a
consensus (looking for common ground) helps parties
come to and agreement. In Congress debates (formal arguments)
are used to bring out the sides of an issue.
Legislatures often use committees to assist members in learning
about an issue or topic. The Seniority System gives more power to
those in Congress that have been there the longest.
Committees include: standing committees that are permanent, joint
committees that have representation from both the House and the
Senate, and conference committees that have member of both
houses that come together to work out differences between bills in
order to send one bill to the President.
The President can sign a bill into law or he can veto the bill in 2
ways: sign a veto resolution, or pocket veto the bill by not
taking any action while the Congress is out of session. Governors
can often use what is called a line-item veto where he/she can
reject a part of the bill and sign the remaining portion into law.
5.02, 5.03 The American Judicial System
The courts system is based on jurisdictions meaning that different
courts have the power to hear different cases.
Jurisdictions;
Original jurisdiction – which court hears the case first.
Appellate jurisdiction – which appeals court hears the appeals from
lower courts.
Concurrent jurisdiction – when more than one court can hear a
case.
Exclusive jurisdiction – when only one kind of court can hear a
case.
                           Types of courts:
Federal courts - cases that involve the US government
General trial courts where most federal cases start.
Courts of appeal the first court to hear an appeal from the general
trial court.
The United States Supreme Court is the last court of
appeal.(judicial review)
Federal judges are appointed by the President and confirmed by
the Senate
State courts – cases within the states ( most cases in the country)
General trial courts (lower courts) hearing misdemeanors (small
crimes); felonies (major crimes)
Appellate courts (the middle court of appeals from the lower courts
State Supreme Court is the highest court of appeals within the
state.
State judges may be elected or appointed.
                       Courtroom vocabulary:
Complaint – accusing a person of wrongdoing Prosecutor -
represents the government (state).
Defendant – person charged with a crime Warrant – allows police
to search and seize property
Arrest Warrant – allows police to arrest someone Summons – a
notice to appear in court
Subpoena – requires a person to appear and testify in court
Brief – a summary of the facts Plea – defendants statement of guilt
or innocence.
Public defender – a no cost attorney for a defendant Perjury – lying
under oath
Indictment – a charge that sends a case to trial Grand Jury – hears
evidence for indictments
Verdict – a judgment of guilt or innocence Sentence – punishment
Plea bargaining – deal in which the defendant pleads to a lesser
charge.
Capital offense – a crime punishable by death
From the appeals level:
Writ of Certiorari – request of court documents from a lower court.
Majority Opinion – decides the case Dissenting Opinion – view of
the minority
Concurring Opinion – view from a judge that votes with the majority,
but for a different reason.
5.05 Local Governments
Towns or cities. Both operate on a budget. County governments
run courts, libraries, schools, hospitals, and elections. Cities
provide streets, drainage, parks, police and fire departments,
transportation, and zoning.
Annexation is the legal merging of one territory into another one
(used by cities to expand their control).
5.06 Public Policy
Citizens can affect public policy by: voting, local initiatives (started
usually by signing a petition), referendums that approve
measures passed by legislatures (in NC, the lottery), and recall
elections that remove an elected official from office (in CA,
Gov. Gray Davis lost his job to Arnold Schwartzenegger).
There are special interest groups that care about single issues
concerning public policy: American Association of Retired
Persons (AARP), National Organization of Women (NOW), trade
unions, small business owners, and others.
Governments get money to fund special needs through the sale of
bonds. Those bond sales must be approved by the voters.
Goal 6 The American Legal System
6.01 Development of Our Legal System
A legal code spells out the laws and the way the law is
administered.
Laws go back to the Ten Commandments and the Code of
Hammurabi which set down in writing the punishments for breaking
the laws. Romans set forth laws that lasted for a long time and are
the basis of our laws of today.
England was the source of most American laws. The Magna Carta
limited the power of the king and the English Bill of Rights that the
king can not make laws without the consent of Parliament. It is
through British common law (laws based on custom and precedent)
that we have our US laws of today.
There were laws in America before the pilgrims arrived. The Indians
developed laws known as the Iroquois Confederacy. The first
representative government was known as the House of Burgesses
in VA. The first document ruling Plymouth Colony was the
Mayflower Compact. The Declaration of Independence declared the
13 colonies free of British rule. And, the Constitution is the supreme
law of the United States.
6.02 Types of Laws
Common law – laws based on custom, traditions, and precedents.
Statutory laws – laws created by the government in order to
respond to different social needs.
Constitutional law – laws spelled out in the founding documents
(the Constitution).
Criminal laws – penal laws that punish criminals for committing
crimes against the state or people.
Civil laws – laws that regulate relationships between people and
organizations.
Administrative law – the regulations and rules set down for the
government.
International law – rules covering the relationships between
countries or nations.
6.03, 6.07 Law Enforcement
The government must enforce laws to protect the people.
In the federal government the Department of Justice (DOJ)
enforces federal laws. The Federal Bureau of Investigation (FBI) is
the federal police force. The United States Secret Service protects
the President and other high ranking government officials.
The National Guard is the military wing of the federal government.
In cities we have police, in counties we have the sheriff’s office to
enforce the laws.
6.04, 6.05 Knowing the Law
An informed citizenry is a necessity and a responsibility of the
citizens is to know the law.
“Ignorance of the law is no excuse”. Citizens should know the laws
that affect them.
Citizens can learn the law through: town meetings, public hearings,
mass media (TV and radio).
6.06 Lobbying
Lobbying is the act of interest groups trying to impact the
government. Lobbyists represent special interest groups and try to
persuade legislators to pass laws beneficial to their clients. There
are lobbyists in Washington and Raleigh representing
doctors, lawyers, farmers, businesses, unions, churches,
environmentalists, teachers, women, minorities, and hundreds of
other special interest groups.
In addition to lobbyists are think tanks that study problems and offer
solutions to the government.
6.08 Addressing Criminal Behavior
All governments try to reduce crime.
Punishment of criminals is justified in 3 ways: retribution – criminals
deserve to be punished because they inflicted harm on another,
deterrence – criminals and others will see the punishment and try to
avoid having that punishment put on them, and rehabilitation –
criminals can be educated and trained while in prison to be
productive citizens.
There are 2 types of punishments: incarceration (locked up) and
monetary compensation (a payment of money or the return of
property)
 the 1990s “3 Strikes” law was enacted and said that on the
  In
third conviction for a person that person will receive extra
time in prison up to life in prison.
Parole offers prisoners a release into a supervised program until
his/her sentence is finished.
Probation gives those convicted of a crime a return to the
community with a lot of rules.
Suspension takes away a privilege such as a driver’s license.
Detention allows the state to hold people in boot camps for
rehabilitation.
Capital punishment is the death penalty an prisoners are held on
Death Row until the execution.
Goal 7 Economics
Economics is a social science. It studies how societies choose to
use limited resources to satisfy their unlimited wants and
needs.
7.01 Production
The 3 basic economic questions: what should we produce, how
should we produce it, and for whom should we produce it?
There a 4 factors in production that answer the 3 questions above:
land, labor, capital, and entrepreneurship. Land – property and
resources, Labor – workers, Capital – money, machinery, and
buildings, Entepreneurship – human effort that brings the other 3
factors to work successfully.
Resources necessary for production are either renewable (things
that can be replaced like trees) and nonrenewable (things that can
not be replaced like minerals and oil).
Productivity is the efficient use of production. The factory that can
make the most items for the same amount of investment is more
productive than the one that makes fewer items. The higher the
productivity the higher standard of living of the society.
7.02 Scarcity
Production creates goods that people own (cars, houses, phones)
while services are things that people use
(internet, fast food, hotels).
Producers make goods and services that people use to satisfy their
wants and needs. People have limited resources (income or
wealth) which causes them to make decisions about using those
resources. If you spend you can not save. People are forced to
make decisions (economic choices) because our wants and needs
are greater than our resources (money).
Price measures the value of a good or service. Wages (per hour
pay) and salaries (per year pay) are the price of labor for the
employer.
There is a decision making model: recognition of a want or need ----
information search----evaluation of alternatives----the
purchase----post purchase evaluation. The smaller the purchases
some of steps can be eliminated.
Not all costs are private. Some costs are for society ----too many
cars causes pollution for society.
7.03, 7.04 Economic Factors
Economic choices involve tradeoffs (opportunity costs). If you
purchase too many expensive meals you probably won’t have
money for the down payment for a house.
Prices are set by balancing production with consumption. Supply
and Demand.
Incentives are encouragements by businesses to buy a product
(frequent flyer miles, and no payments till next year). Wants are our
desires and needs are our necessities.
Types of business costs: Fixed costs – rarely change like rent over
the year, Variable costs – changing costs that move because of
changing levels of production (salaries, wages, and overtime), Total
costs – adding fixed and variable costs together, and Marginal
costs – the cost of making more items than originally planned.
Division of labor is breaking a task into several specifics tasks for
maximum productivity. These tasks require specialization and skills
to do a specific job in production. The assembly line uses division
of labor and specialization. Division of labor allows mass production
to happen.
Human capital are the skills and abilities of the workers. Innovation
is the creation of new inventions and technologies used to make a
business successful. White collar workers refers to office work and
blue collar workers refer to the workers out in the plant.
Agribusiness is mass production in farming.


7.05 Investment
Investment puts money to work to make more money. Investment is
the chief factor for economic growth.
Inputs are the factors of production, and output is the product or
service produced.
If it take too much input to make one more item then you have a
diminishing return on your investment.
It was better to make one item less.
Consumer goods are used by the public and capital goods are used
to further production.
7.06 Economic Systems
Traditional economies (mostly agricultural) rely on tradition,
customs, and habits.
The market is the place where buyers and sellers come together. In
a market economy the government allows the buyers and sellers to
regulate production and exchange.
Capitalism – people have the right to own property, and people
have a right to make a profit for their work. Profit is the income left
after the bills are paid.
Consumer sovereignty – choices made by consumers decide the
profits of the producers and which businesses are going to succeed
and which are going to fail. Laissez-faire economics allows that the
government lets the people make free choices with out
governmental interference.
Communism – the government makes all of the decisions
concerning production. Socialism – combines communism and
capitalism in a mixed economy.
Fiscal policy – government spending and taxing. Deficit spending –
spending exceeds revenues (taxes).
Goal 8 The United States Economy
8.01, 8.02 Comparing Economic Systems
Traditional , market, command, and mixed economies. (See
7.06)
Another name for market economy is free enterprise. Private
property can be land, buildings, tools, and vehicles, but private
property can also be patents ( a license for exclusive use of product
or method of doing something) or copyrights (a license for
creative ideas like music, books, art).
There are 3 goals of free enterprise
1. people can/will buy and sell what they want (voluntary exchange)
2. full employment (almost everyone has a job – some people will
always be looking for a job
3. businesses can make as much profit as possible.
Profit is often based on: efficiency (the cost of making each item of
production) and productivity
(how much productions there is per employee).
Production can be done where: each worker makes a product from
start to finish or each worker has a specific task to do
(division of labor/specialization).
Businesses buy two factors of production: labor (workers) and
capital (money to buy the machines).
Households provide those two factors: workers and investments
used capital.
The price of labor is wages or salaries. The price of capital is
interest (rent paid for the use of money).
A product market supplies goods and services for sale to
households.
The circular flow of economic activity traces the flow of money to
households as wages and return of the wages to the
businesses in purchase
Law of Demand - when the price goes up demand goes down.
Law of Supply – when the price goes up the quantity of the product
goes up.
The Law of Supply and Demand – price will keep changing until
supply and demand are equal (this is called the equilibrium price)
Products have complementary products (items that go together)
and substitute products (items that can replace each other).
Supply side economics says that the government should cut taxes
on businesses to increase productivity. This supply side theory
holds that when owners have more money they will invest in their
business by hiring more workers who will have more money to
spend generating more profits which will generate more taxes.
Demand can be graphed on a demand curve. The amount of
money left after paying for necessities is called disposable income.
Influence on prices: consumer taste (what consumers want),
surplus (more supply than needed), controls set by the
government, interest rates. Inflation is when prices go up without
any change in supply or demand. Deflation is when prices fall
without any change in supply or demand.
The market is where goods and services are bought and sold.
Buyers decide how much of a product is bought and sellers who
decide much of a product is supplied. Buyers tell how much they
are willing to pay for a product, and sellers tell how much they are
willing to accept for the product.
In a competitive market a business makes as much of a product it
can before it starts to lose money.
Businesses try to make a profit.
When a business is the only producer of a product and there is no
substitute for that product that business becomes a monopoly.
A monopoly a business can set the price and supply wherever it
wants because there is no competition (Microsoft).
Oligopoly is where a few businesses dominate the market (Coke
and Pepsi).
Businesses try to get advantages over other businesses by buying
other firms (mergers). In a horizontal merger businesses try to buy
up other businesses that make or offer the same product or service.
In a vertical merger businesses try to buy up a different part of the
same product or service. In a conglomerate businesses buy up
other companies that are totally unrelated.
There are 4 types of business organizations: sole proprietorship –
one owner who makes all of the decisions and takes all of the
responsibilities, partnerships – shared decisions, but each partner
remains fully responsible, limited liability partnerships – shared
decisions, but limited responsibilities, and corporations – formed by
a legal charter where people buy stock in the company and share in
the profits of the company.

                        Types of Businesses
Type                    Life of Business                   Liability of owners
Sole Proprietorship    Limited to life of owner            Unlimited to owner
(Individual)
Partnership             Limited to life of either owner    Unlimited to each owner
Corporation             Unlimited life                  Limited for each stockholder

Labor Workers gather together in unions to promote higher wages
and better working conditions through a process called collective
bargaining. Unions can fight management through strikes, and
boycotts. Owners can fight unions by using lockouts. When
negotiations fail two methods may help arrive at a decision:
Arbitration is where both parties tell their side to an arbitrator who
renders a binding decision. In mediation the parties meet and a
mediator help them reach a decision.
Barter is trading one item for another without using money. Money
is used for three functions:
1. a medium of exchange 2. a unit of measure 3. store of value
Financial institutions can take several forms:
Banks – commercial and mutual that make money by loaning
money to people and businesses
Savings and Loans – make loans to people to by homes and
businesses
Credit unions – offer banking services to members
FDIC is the Federal Deposit Insurance Corporation that insures
deposits of individual up to $100,000.
Monetary policy is the regulation of money by the government. The
Federal Reserve Bank can put more money into circulation by
lowering interest rates which allows people and businesses to
borrow money a t a cheaper rate. By the same method the Fed can
take money out of circulation by hiking the interest rate which
makes it harder to get loans.
The federal government can manage its taxation and spending to
insure economic growth through fiscal policy.
Household can invest in insurance against future problems: life
insurance, medical insurance, auto insurance, property
insurance, disability insurance, and travel insurance.
Goal 9 Factors in US Economy
9.01 , 9.04 The Business Cycle
The long term pattern changes in our economy are called the
business cycle. The four stages of this cycle are;
Expansion – an economy that is growing, Prosperity – an economy
that is healthy, Contraction – an economy that is declining, and
Recession –an economy that continues to decline for 6 months.
Then the cycle will start over.
GDP – is the measure of all goods and services produced in a year.
The standard of living for a country or a person is
measured by: Income, Education, Debt.
The Department of Homeland Security is responsible for protecting
America from terrorism.
In NC businesses have been hurt by: downsizing – cutting workers
to cut costs and improve profits, and by outsourcing –
sending a part of the business overseas so that they can use
cheaper labor which will cut costs and improve profits.
9.02, 9.03 Economic Influences
Most industries and businesses regulate themselves, but
sometimes the government gets involved. The government tries to
protect the public (consumers) and protect the environment. The
EPA – the Environmental Protection Agency is charged with saving
the environment.
The government also gets involved in labor disputes between
unions and management. The government also fights
discrimination through affirmative action laws.
Regulation is the government getting involved in businesses, and
deregulation is the government getting out of the way of
businesses.
The population of America is moving from the Northeast and
Midwest to the South and Southwest. This is due to jobs, climate,
and affordable property. Immigration has also brought many more
people the South and Southwest from Latin America.
Production no longer dominates the American economy like it once
did. Today, the service economy provides more jobs than
production jobs.
9.05, 9.06 Domestic and International Economies
Global interdependence is the relationship of different countries of
the world that depend on each other for goods and services.
International trade is the exchange of goods between countries of
the world.
Countries want a favorable trade balance (exports are greater than
imports) to increase their economy. An unfavorable trade balance
exists when imports exceed exports causing American money to
leave the country. Tariffs are taxes on imports. Protective tariffs
protect American industry by making the cost of imported goods go
up.
The exchange rate is the price one currency can be exchanged for
the currency of another country.
NAFTA is the North American Free Trade Agreement which ends
trade barriers between the US, Mexico, and Canada.
WTO, the World Trade Organization sets the rules for trade
between countries. The IMF, International Monetary Fund,
monitors world finances and encourages countries to work
together. The World Bank is an international banking organization
that helps poorer countries by making low interest loans to those
countries to help them escape poverty.
Developed countries like the US have high standards of living (high
GDP, high incomes). Developing countries have low
GDP, low incomes and therefore low standard of living.
Free trade refers to the unrestricted flow of goods between
countries. Foreign aid is giving money and capital goods to poor
countries to help them recover. Problems exist in world trade like:
child labor and human rights.
9.07 US Fiscal and Monetary Policy
The government tries to help the economy through monetary policy
and fiscal policy. Loose money means that there is plenty of money
to borrow and interest rates drop. Tight money means there is less
money to borrow and interest rates go up to discourage borrowing.
Interest rate is price paid to borrow money for a period of time.
People and businesses borrow from banks. The discount rate is the
interest rate paid by banks to borrow money from the Federal
Reserve Bank of the government.
Fiscal policy determines have the government raises and spends
money. Fiscal policy tries to stabilize economic growth
through taxes and government spending. Taxes include: income
taxes (progressive in that the more you make the higher your rate),
excise taxes, and sales taxes.
9.08 Individual Economic Activity
People should base their personal spending decisions on economic
conditions. When prices go up for most goods over a
period of time we call it inflation.
The stock market goes up (a bull market) and goes down (a bear
market).
OPEC is the Organization of Petroleum Exporting Countries (Iran,
Saudi Arabia, Venezuela).
Zoning is a system of regulating land use by mapping out zones for
residential, commercial, and industrial. Building code are rules for
construction that insure that the buildings are safe to use.
Goal 10 Personal Responsibilities
10.1, 10.04 Civic Responsibility (see 4.08)
10.02 Diversity in America
America is a nation of immigrants, so we face many questions
about unity and diversity. Assimilation is the process of making
different groups a part of a larger group. The US is called a “melting
pot” because we have so many groups in America.
Diversity is taking America from one mainstream culture into sub-
cultures based on ethnicity. Diversity is also called
multiculturalism. Some believe that diversity makes America
stronger. For diversity to work people must be tolerant toward
people of different races, religions, and languages.
Discrimination takes several forms: religion, gender, sexual
orientation, race, weight, intelligence, socio-economics, and age.
10.03 Self-Reliance
America and Americans are typically self reliant. They take care of
themselves and prefer to depend on no one for assistance.
10.05 Conflict and Resolution (see 4.09)
10.06 Consequences of Freedom
Freedom means people can and do make choices about their lives.
Free citizens can choose their own leaders. Free citizens can make
economic choices. Free citizens can move up or down the
socioeconomic ladder as they choose to work. Freedom comes
with accountability and responsibility.
GOOD LUCK !