Chapter 5: What Is the Economic Problem? National Economic Goals 86–88 86–88 Activity 1: National Economic Goals Survey (pp. 49–50) Objectives: 1. Identify the economic problem. 2. List the four primary economic goals of most nations. 3. Evaluate the economic goals of a nation based on a biblical worldview. Worldview: Work is God’s way to provide personal income. Three Economic Questions Activity 2: The Distribution Question (p. 51) Activity 3: The Output Question Objectives: 1. List the three critical economic questions. 2. Explain the command and market solutions to each of the three economic questions. 3. Describe the egalitarian and libertarian concepts of fairness. 4. Explain the biblical principles that apply to the distribution question. 5. Evaluate solutions to the three economic questions from a biblical worldview. Chapter Review 101 101 Activity 4: Review (pp. 54–56) Activity 5: Crossword Puzzle (pp. 57–58) Chapter Test Chapter 6: Economic Systems Early Economic Systems Activity 1: I, Pencil (pp. 61–63) Objectives: 1. Describe mercantilism. 2. Describe Adam Smith’s contribution to economics. 3. Define laissez-faire liberalism. Worldview: 1. Christians should guard against coveting others’ wealth. 2. God considers wisdom to be of more value than wealth. Modern Economic Systems Activity 2: Economic Systems and Public Opinion (pp. 65–66) Objectives: 1. Identify the two questions that help determine whether an economy is capitalistic or socialistic. 2. Describe each of the major forms of capitalism. 3. Describe each of the major forms of socialism. 4. Explain how free-market capitalism compares to scriptural principles. 5. Explain how socialism compares to scriptural principles. Chapter Review 121 121 Activity 3: Review (pp. 67–69) Chapter Test
Chapter 14: Inflation Impact and Measurement Activity 1: How Inflation Affects You (pp. 157–58) Activity 2: Creating Your Own CPI (p. 159) Activity 3: Changes in the Price Level vs. Changes in the Prices of Classes of Goods (pp. 161–62) Objectives: 1. Explain the reason for COLAs. 2. Identify the groups that are harmed by inflation and explain why. 3. Name the two measures used by economists to gauge inflation. 4. Identify the uses of the CPI. 5. Describe the limitations of the CPI. Worldview: Inflationary woes, like other economic problems, are often produced by man’s sin and consequently are remedied by turning from man’s way to God’s way. Causes and Cures Activity 4: The Phillips Curve: An Either/Or Fallacy (pp. 163–65) Objectives: 1. Describe cost-push inflation. 2. Describe demand-pull inflation. 3. Explain why growth of the money supply is the root cause of inflation. 4. Explain the results of using wage and price controls as a cure for inflation. Chapter Review 293 293 Activity 5: Review (pp. 167–68) Chapter Test Chapter 15: Fiscal Policy Governmental Spending 301–7 301–7 Activity 1: The National Debt and the GDP (pp. Objectives: 1. Define fiscal policy. 2. Explain Keynes’s solution to the business cycle. 3. Describe the marginal propensity to consume and its effect on the money supply. 4. List and explain the problems of governmental spending as a tool of fiscal policy. Worldview: 1. A Christian has a responsibility to pray for his country and its leaders. 2. Though not neglecting civic responsibilities, the Christian’s confidence is not in government or its leaders but in God. Taxation Activity 2: Taxes and Incentive to Work (pp. 173–74) Objectives: 1. List the major sources of the government’s tax revenue. 2. Contrast proportional taxes, progressive taxes, and regressive taxes. 3. List and explain the problems with taxation as a tool of fiscal policy. Governmental Borrowing Activity 4: Computations (p. 177) Objectives: 1. Explain the Keynesian concept of “pump priming.” 2. List and explain the problems with governmental borrowing as a tool of fiscal policy.