Thursday, February 3 & Monday, February 7, 2011

The US Economy: Private and Public Sectors


Students shall be able to

  1. define durable goods, nondurable goods, services, spillover benefits, spillover costs, and public goods.

  2. explain the four shares in the functional distribution of income.

  3. explain the personal distribution of income.

  4. state the three major categories of household spending and relative shares of each.

  5. state two ways in which government enhances the operation of the market system.

  6. explain how government alters income distribution.

  7. explain the effects of spillover benefits and spillover costs and how government can correct for them.

  8. explain what is meant by a public good and why government must provide these.

  9. explain how government can reduce unemployment and inflation.

  10. explain the circular flow of economic activity.

  11. differentiate between government purchases and transfer payments.

  12. identify the major categories of federal spending and the major sources of federal revenue.


  1. Lecture/discussion: Private and Public Sectors of the Economy.

  2. Chapter 5 quiz.

  3. Build the circular flow model.


  1. Take notes.

  2. Take the quiz.

  3. Draw and annotate the complete (domestic) circular flow.

  4. Read M&B chapter 7 for Wednesday. Expect a quiz!



Monitor and adjust to check understanding. Grade the quizzes.