1. Mandatory v. Discretionary Spending
To explicitly assess information and draw conclusions

2. Review Test

3. What would happen to: Revenue (Receipts) Spending (Outlays) Deficit
Unemployment rises due to a financial crisis
Companies have expanded their production
The terrorist threat level has been lowered
The baby boomers are retiring earlier than planned
Revenue (Receipts)
Spending (Outlays)
Deficit
Debt

4. Definitions
Mandatory: parts of the federal budget that are set by law and are uncontrollable/adjustable
Discretionary: parts of the federal budget over which Congress has complete control

5. Pie Charts
Turn your desks into groups of 4
With your group, look through the pie charts and answer the questions that go along with them

10. Quiz Answers 1. Discretionary 2. Outlays 3. Social Security 4. Debt
5. Deficit
6. Federal Budgets
Office of Management and Budget

11. Free Ride Problem
Goods and Services that are accessible and beneficial to all
Things that you could benefit from, whether or not you paid
Why we have taxes!
The government provides the goods and services to all but can’t afford to have “free riders”
Privatization: handing over control of public functions to private companies. Can refer to goods or services
Public Sector: part of the economy concerned with providing basic government services
Includes such services as the police, military, public roads, public transit, primary education and healthcare for the poor