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Daily Lecture andDiscussion Notes

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To The TeacherThis Daily Lecture and Discussion Notes booklet for Civics Today: Citizenship,

Economics, and You provides detailed outlines for each section of the student text-book, page number references, and discussion questions to encourage studentparticipation in classroom activities. Each section begins with a short, high-interest “Did You Know?” anecdote.

To the Teacher ..............................................................................................ii

Chapter 1 Citizenship and Government in a DemocracyDaily Lecture Notes 1-1: Government of the People,

by the People, for the People ......................................1Daily Lecture Notes 1-2: The Path to Citizenship ...............................................4Daily Lecture Notes 1-3: The Diversity of Americans .........................................6

Chapter 2 Roots of American DemocracyDaily Lecture Notes 2-1: Our English Heritage ..................................................9Daily Lecture Notes 2-2: The Birth of a Democratic Nation ...............................11Daily Lecture Notes 2-3: The Nation’s First Governments..................................14

Chapter 3 The ConstitutionDaily Lecture Notes 3-1: The Road to the Constitution .....................................16Daily Lecture Notes 3-2: Creating and Ratifying the Constitution .......................18Daily Lecture Notes 3-3: The Structure of the Constitution ................................21Daily Lecture Notes 3-4: Principles Underlying the Constitution ........................24

Chapter 4 The Bill of RightsDaily Lecture Notes 4-1: The First Amendment................................................27Daily Lecture Notes 4-2: Other Guarantees in the Bill of Rights.........................29Daily Lecture Notes 4-3: Extending the Bill of Rights........................................32Daily Lecture Notes 4-4: The Civil Rights Struggle............................................34

Chapter 5 The Citizen and the CommunityDaily Lecture Notes 5-1: The Duties and Responsibilities of Citizenship .............36Daily Lecture Notes 5-2: Volunteering in Your Community................................38

Chapter 6 CongressDaily Lecture Notes 6-1: How Congress Is Organized .......................................40Daily Lecture Notes 6-2: The Powers of Congress ............................................43Daily Lecture Notes 6-3: Representing the People ...........................................46Daily Lecture Notes 6-4: How a Bill Becomes a Law ........................................49

Chapter 7 The President and the Executive BranchDaily Lecture Notes 7-1: The President and Vice President................................51Daily Lecture Notes 7-2: The President’s Job ...................................................54Daily Lecture Notes 7-3: Making Foreign Policy...............................................56Daily Lecture Notes 7-4: Presidential Advisers and Executive Agencies...............58

Contents

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Chapter 8 The Judicial BranchDaily Lecture Notes 8-1: The Federal Court System..........................................62

Daily Lecture Notes 8-2: How Federal Courts Are Organized.............................64

Daily Lecture Notes 8-3: The United States Supreme Court ...............................67

Daily Lecture Notes 8-4: Deciding Cases at the Supreme Court..........................70

Chapter 9 Political Parties and PoliticsDaily Lecture Notes 9-1: Development of American Political Parties ..................73

Daily Lecture Notes 9-2: Organization of American Political Parties...................77

Daily Lecture Notes 9-3: Role of Political Parties Today....................................79

Chapter 10 Voting and ElectionsDaily Lecture Notes 10-1: Who Can Vote? .......................................................81

Daily Lecture Notes 10-2: Election Campaigns .................................................84

Daily Lecture Notes 10-3: Paying for Election Campaigns..................................86

Chapter 11 Influencing GovernmentDaily Lecture Notes 11-1: Public Opinion........................................................89

Daily Lecture Notes 11-2: The Mass Media ......................................................91

Daily Lecture Notes 11-3: Interest Groups.......................................................94

Chapter 12 State GovernmentDaily Lecture Notes 12-1: The Federal System .................................................97

Daily Lecture Notes 12-2: The State Legislative Branch ...................................100

Daily Lecture Notes 12-3: The State Executive Branch .....................................103

Daily Lecture Notes 12-4: The State Judicial Branch........................................105

Chapter 13 Local GovernmentDaily Lecture Notes 13-1: City Government ...................................................107

Daily Lecture Notes 13-2: County Governments..............................................111

Daily Lecture Notes 13-3: Towns, Townships, and Villages ...............................113

Chapter 14 Dealing With Community IssuesDaily Lecture Notes 14-1: How a Community Handles Issues ...........................115

Daily Lecture Notes 14-2: Education and Social Issues .....................................117

Daily Lecture Notes 14-3: Environmental Issues .............................................120

Chapter 15 Legal Rights and ResponsibilitiesDaily Lecture Notes 15-1: The Sources of Our Laws ........................................122

Daily Lecture Notes 15-2: Types of Laws .......................................................124

Daily Lecture Notes 15-3: The American Legal System ....................................126

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Chapter 16 Civil and Criminal LawDaily Lecture Notes 16-1: Civil Cases ............................................................129Daily Lecture Notes 16-2: Criminal Cases.......................................................131Daily Lecture Notes 16-3: Young People and the Courts ..................................134

Chapter 17 Citizenship and the InternetDaily Lecture Notes 17-1: Civic Participation ..................................................137Daily Lecture Notes 17-2: Challenges for Democracy ......................................139Daily Lecture Notes 17-3: Regulating the Internet ...........................................141

Chapter 18 What Is Economics?Daily Lecture Notes 18-1: The Fundamental Economic Problem .......................144Daily Lecture Notes 18-2: Making Economic Decisions ....................................146Daily Lecture Notes 18-3: Being an Economically Smart Citizen .......................149

Chapter 19 The American EconomyDaily Lecture Notes 19-1: Economic Resources ...............................................151Daily Lecture Notes 19-2: Economic Activity and Productivity ..........................153Daily Lecture Notes 19-3: Capitalism and Free Enterprise................................155Daily Lecture Notes 19-4: The Economy and You ............................................157

Chapter 20 DemandDaily Lecture Notes 20-1: What Is Demand? ..................................................160Daily Lecture Notes 20-2: Factors Affecting Demand.......................................162

Chapter 21 SupplyDaily Lecture Notes 21-1: What Is Supply? ....................................................164Daily Lecture Notes 21-2: Factors Affecting Supply .........................................166Daily Lecture Notes 21-3: Markets and Prices ................................................168

Chapter 22 Business and LaborDaily Lecture Notes 22-1: Types of Businesses ...............................................171Daily Lecture Notes 22-2: Labor Unions ........................................................174Daily Lecture Notes 22-3: Businesses in Our Economy ....................................176

Chapter 23 Government and the EconomyDaily Lecture Notes 23-1: The Role of Government ........................................178Daily Lecture Notes 23-2: Measuring the Economy .........................................181Daily Lecture Notes 23-3: Government, the Economy, and You ........................185

Chapter 24 Money and BankingDaily Lecture Notes 24-1: What Is Money? ....................................................187Daily Lecture Notes 24-2: The Federal Reserve System ...................................189Daily Lecture Notes 24-3: How Banks Operate...............................................192

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Chapter 25 Government FinancesDaily Lecture Notes 25-1: The Federal Government ........................................194

Daily Lecture Notes 25-2: State and Local Governments..................................197

Daily Lecture Notes 25-3: Managing the Economy ..........................................199

Chapter 26 Comparing Economic SystemsDaily Lecture Notes 26-1: International Trade and Its Benefits.........................201

Daily Lecture Notes 26-2: Economic Systems .................................................205

Daily Lecture Notes 26-3: Economies in Transition .........................................208

Chapter 27 Comparing Systems of GovernmentDaily Lecture Notes 27-1: Types of Government .............................................211

Daily Lecture Notes 27-2: A Profile of Great Britain........................................214

Daily Lecture Notes 27-3: A Profile of China ..................................................217

Chapter 28 An Interdependent WorldDaily Lecture Notes 28-1: Global Developments ............................................220

Daily Lecture Notes 28-2: The United Nations ...............................................223

Daily Lecture Notes 28-3: Democracy and Human Rights ................................226

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I. What is Civics? (page 6)

A. Civics is the study of the rights and duties of citizens. In ancient Greece and Rome,only men with property could be citizens.

B. Today, most people are citizens of the country where they live. Citizens have rightsand responsibilities. Citizens agree to accept the government’s authority and follow itsrules.

Discussion QuestionWhat is civics? (Civics is the study of the rights and duties of citizens.)

II. The Need for Government (page 7)

A. A government is the ruling authority for a community. It has the power to makeand enforce laws for its members.

B. Thomas Hobbes claimed that without government, human beings would compete forterritory, resources, and power. Fighting would be common, and survival woulddepend on strength and cunning.

C. Government can make it possible for people to live together peacefully and productively.

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Copyright © by The McGraw-Hill Companies, Inc.

Chapter 1, Section 1

Government of the People, by the People, for the People (pages 6–12)

Did You Know? The word “democracy” comes from theGreek words demos, meaning people, and kratein, meaning torule. In ancient Athens, the “birthplace of democracy,” theAssembly included all male citizens. The Assembly passed lawsand decided public policy. All citizens could attend the massmeetings held on the Hill of the Pnyx at the foot of the Acropolis.

Discussion QuestionHow can government make it possible for people to live together peacefully andproductively? (Government has the power to make and enforce laws. It sets the rules thatkeep a community from becoming a chaotic free-for-all.)

III. The Functions of Government (pages 7–9)

A. Governments keep order and provide security. They make laws to help prevent con-flicts among people and to settle conflicts that do arise. They set up armed forces andagencies to defend citizens and their land from enemies.

B. Governments provide services that would not be available without cooperation andcoordination. They provide services to keep the public healthy and safe. They alsogive help to needy people.

C. Governments guide the community. They set public policy, or a course of govern-ment action to achieve community goals. They make public policy when they passlaws to reach a public policy goal.

D. Governments create a budget, or a plan for collecting and spending money, as part ofpolicy decisions. Governments develop relations with the community’s neighbors andother outsiders for the benefit of all.

Discussion QuestionWhat are some key functions of government? (Governments help to keep order andprovide security. They provide services that would not be available without cooperation andcoordination. They guide the community by setting public policy, formulating budgets, anddeveloping relations with the community’s neighbors and other outsiders.)

IV. Levels of Government (pages 9–10)

A. Many levels of government may exist within a country. The highest level in theUnited States is the national government, centered in the capital, Washington, D.C. It makes laws for the entire country.

B. State governments make laws for the people of their states. Local governmentsinclude counties, cities, and towns. State and local governments cannot take actionsthat go against laws and authority of the national government.

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Chapter 1, Section 1 (continued)

Discussion QuestionName the levels of government, from the broadest level of authority to the narrowest. (The national government has the broadest level of authority, followed by stateand local governments. Governing bodies of organizations are the narrowest level of thosediscussed.)

V. Democratic Government (pages 10–12)

A. A dictatorship is a government controlled by one person or a small group. TheUnited States government is a democracy, a government in which the people rule.In a democracy, all citizens share in governing and being governed.

B. Democracy began in ancient Athens. Athens had a direct democracy—all citizensmet to debate government matters and vote firsthand. Large populations make directdemocracy impractical for most countries today. Citizens instead choose a smallergroup to represent them, make laws, and govern on their behalf. This is a represen-tative democracy.

C. Democracies have free and open elections. Everyone’s vote carries the same weight,or “one person, one vote.” All candidates have the right to express their views freely.Legal requirements for voting are kept to a minimum. Citizens may vote freely bysecret ballot, without fear of punishment.

D. Citizens agree that when differences of opinion arise, we will abide by what mostpeople want. This is the principle of majority rule. At the same time, we mustrespect the rights of those in the minority.

Discussion QuestionWhat are five fundamental principles of American democracy? (Five fundamentalprinciples of American democracy are (1) rule of law—all people are bound by law, (2) limited government—government may do only what the people give it the power to do,(3) consent of the governed—citizens are the source of government power, (4) democracy—thepeople rule, and (5) representative government—people elect their leaders.)

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I. Who are America’s Citizens? (pages 14–16)

A. The U.S. Constitution establishes two ways to become a citizen: by birth and, for for-eigners, by a legal process called naturalization.

B. You would automatically be an American citizen if you were born in a state or theDistrict of Columbia, in an American territory, or on a U.S. military base overseas.

C. You can also claim citizenship if your parents are both citizens or one parent is a citi-zen who has lived in the United States. Children born on American soil to non-U.S.citizens also acquire U.S. citizenship, except for children of foreign diplomats.

D. A child born abroad to American parents may hold dual citizenship.

E. Noncitizens, or aliens, may become naturalized citizens. More than half a millionimmigrants—people who move permanently to a new country—gain American citi-zenship each year.

F. Aliens must file a Declaration of Intention with the Immigration and NaturalizationService (INS). They may apply for citizenship after living in the United States for 5years (3 years for aliens married to citizens). Then, after an interview with an INSagent, the applicant must take a citizenship exam. If the INS decides to grant citizen-ship, the new citizen pledges allegiance to this country in a ceremony.

G. Americans keep their citizenship for life, unless they choose to give it up.

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The Path to Citizenship (pages 14–17)

Did You Know? The Statue of Liberty’s official title is “LibertyEnlightening the World.” The people of France gave it to theUnited States as a gesture of friendship. The burning torch in thestatue’s right hand stands for liberty. It shines down on the sevenspikes in her crown, representing the light of liberty shining overall seven seas and seven continents of the world. The tablet inher left arm bears the date July 4, 1776, the date of theDeclaration of Independence, when the United States declareditself free of British rule. A broken chain, representing tyranny, lies at her feet, symbolizing escape from the bonds of unjust rule.

Discussion QuestionUnder what circumstances might an American hold dual citizenship? (Dual citizen-ship means that the person enjoys rights in two countries at the same time. A child bornabroad to American parents may be both a U.S. citizen and a citizen of the child’s country of birth.)

II. Aliens in America (pages 16–17)

A. The United States restricts the number of immigrants who can enter the country.Highest priority goes to relatives of U.S. citizens and people with needed skills.

B. Many aliens live in the United States illegally. Most come looking for a better life.Without friends and family here, life is hard. Laws forbid hiring illegal aliens, so work is hard to find. They live in fear that the government will discover and deport them—send them back to their own country.

C. Legal aliens live like most Americans. They hold jobs and pay taxes. They do not havefull political rights. They may not vote, run for office, or work in most governmentjobs. They must carry identification cards.

Discussion QuestionWhat types of immigrants benefit from the Immigration Act of 1990? (Because of the act, emphasis has shifted toward welcoming “those who want to work and produceand contribute.” The new policy benefits people with particular skills, talents, or the moneyto invest in our economy.)

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I. A Nation of Immigrants (pages 19–21)

A. All of today’s more than 281 million Americans are descended from immigrants.Many scholars believe the first Native Americans crossed a land bridge from Asia to North America.

B. The first Europeans to settle permanently in North America came from Spain duringthe 1500s. They settled in Florida, California, and the Southwest.

C. Beginning in the 1600s, people arrived from France and England. The French settledin Canada and around the Mississippi River. The English settled mainly along the eastcoast, creating the 13 colonies.

D. A flood of immigrants arrived between 1860 and 1890, many from Denmark,Norway, and Sweden. Another flood arrived between 1890 and 1924, mostly fromcentral and eastern Europe.

E. Today, Latin America accounts for the largest share of newcomers, followed by Asia.

F. Western and central Africans were brought to America by force and sold as slaves.

Discussion QuestionWhy did so many Europeans come to the United States after it gained indepen-dence? (After independence, the United States became known throughout Europe as a landof promise.)

II. A Diverse Population (pages 21–22)

A. Americans are ethnically diverse. Whites of European descent are the largest group,followed by African Americans and Hispanics, Asians and Pacific Islanders, and NativeAmericans.

B. Religious diversity thrives in the United States.

C. American culture is a rich blend of varied influences.

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The Diversity of Americans (pages 19–23)

Did You Know? Jazz has been called the first trulyAmerican music. Yet it was born of musical influences that reflectthe rich diversity of this country. African American musicians in19th century New Orleans mixed African American blues withAfrican and Caribbean rhythms, European harmonies, and evenelements of Italian opera to create the rich sound that is jazz.

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Discussion QuestionWho are Hispanics? (Hispanics are people of any race who trace their ancestry to theSpanish-speaking countries of the Western Hemisphere.)

III. A Growing and Changing Population (page 22)

A. In the mid-1800s people began moving from farms to factory jobs in cities. In recentdecades manufacturing jobs declined and service jobs increased. More women haveentered the workforce.

B. After slavery ended, a migration, or mass movement, occurred as African Americansleft the South seeking jobs in the North. Today the South is the most populous and,along with the West, the fastest growing area of the country.

C. The average age of citizens is climbing upward. More Americans now earn collegedegrees.

D. Hispanics are the fastest-growing ethnic group.

Discussion QuestionWhy is the average age of American citizens climbing upward? (Americans are livinglonger and having fewer children.)

IV. Unity Among Citizens (page 23)

A. Americans share a common civic and political heritage based on the country’s found-ing documents. These include ideals of individual rights, popular sovereignty, equaljustice under the law, and majority rule through a representative government.

B. A common language is another source of unity.

C. Americans show patriotism—love for one’s country. We follow the nation’s laws.

D. The attacks of September 11, 2001 were acts of terrorism—the use of violence bygroups against civilians to achieve a political goal. Americans responded with courageand unity.

Discussion QuestionWhat are some ways that Americans show patriotism? (Some ways include flying theflag, singing the national anthem, and reciting the Pledge of Allegiance. Americans also fol-low the nation’s laws and participate in civic life.)

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I. Influences from England’s Early Government (pages 28–30)

A. The English brought with them a history of limited and representative government.England was ruled by a monarch—a king or queen, but nobles held much power.

B. The nobles forced King John to sign the Magna Carta. This document upheld rightsof landowners including equal treatment under the law and trial by one’s peers. Itlimited the power of the king or queen.

C. Nobles and church officials who advised Henry III developed into a legislature—a lawmaking body—known as Parliament. In a power struggle, Parliament removedKing James II from the throne. This peaceful transfer of power was the GloriousRevolution. From then on, no ruler would have more power than the legislature.

D. Parliament drew up the English Bill of Rights. It required the monarch to getParliament’s consent to impose taxes, raise an army, or create special courts. It guar-anteed free elections, free speech, a fair jury, and no cruel and unusual punishments.

E. In its early days, England had no written laws. People developed rules to live bywhich came to have the force of law. Judges made rulings consistent with prece-dents, or rulings in earlier cases that were similar. The system of law based onprecedent and custom is known as common law. Our laws are based on Englishcommon law.

Discussion QuestionWhat were some rights guaranteed by the English Bill of Rights? (This documentguaranteed free election of members of Parliament, free speech for Parliament members dur-ing meetings, the right to a fair jury in court cases, and that cruel and unusual punishmentswould be banned.)

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Our English Heritage (pages 28–32)

Did You Know? The Pilgrims had promised to settle withinthe area granted to the Virginia Company, but rough weather andnavigation errors took them to New England instead. Pilgrim lead-ers worried about their legal position because they did not havethe authority to settle in this area. They signed the MayflowerCompact to solve this problem as well as to set up a government.

II. Bringing the English Heritage to America (pages 30–31)

A. A colony is a group of people in one place who are ruled by a parent country elsewhere. English colonists in America remained loyal subjects of England. Theyaccepted common law and expected the same rights they enjoyed in England.

B. A charter is a written document granting land and the authority to set up colonialgovernments. The Virginia Company’s charter promised the colonists of Jamestownthe same liberties as in England.

C. The colonists chose representatives called burgesses to meet with the governor. Theserepresentatives formed the House of Burgesses, the first legislature in the colonies. Itmarked the beginning of self-government in the colonies.

D. Before arriving in Plymouth, the Pilgrims drew up the Mayflower Compact, a writ-ten plan that set up a direct democracy in the colony. A compact is an agreement, orcontract, among a group of people. All men would vote. The majority would rule.

Discussion QuestionWhat expectations for government did English colonists bring with them toAmerica? (They accepted common law and believed that the ruler was not above the law.They also expected to have a voice in government and other basic rights that they had enjoyedin England.)

III. Early Colonial Governments (pages 31–32)

A. Later English colonies along the east coast followed the examples of the MayflowerCompact and the House of Burgesses. Each colony had a governor and elected legisla-ture, often modeled after Parliament.

B. The colonial governments took on more power over time, as the king and Parliamentwere preoccupied at home. The colonists grew used to making their own decisions.

Discussion QuestionWhat examples did new colonies follow in setting up their governments? (They followed the examples of the Mayflower Compact and the House of Burgesses. Many coloniallegislatures were modeled after the English Parliament.)

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I. Colonial Resistance and Rebellion (pages 33–35)

A. The British government began to tighten its grip on the American colonies. George IIIadopted a policy of mercantilism, the theory that a country should sell more goodsto other countries than it buys. Britain wanted to buy American raw materials at lowprices and sell colonists British products at high prices.

B. Britain won land in North America from France in the French and Indian War. To payoff war debts and cover the costs of ruling the new lands, Britain taxed the colonists.

C. Colonists resented the taxes. They had no representatives in Parliament—“No taxa-tion without representation.”

D. In protest, many colonists decided to boycott, or refuse to buy, British goods. As a result, Parliament agreed to repeal, or cancel, the Stamp Tax and other taxes.However, Parliament soon replaced them with new taxes. Parliament’s DeclaratoryAct stated that it had the right to tax and make decisions for the colonies.

E. The Townshend Acts taxed needed goods imported to the colonies. The colonistsagain boycotted.

F. The Tea Act allowed the British East India Company to bypass colonial merchants and sell tea directly to shopkeepers at low prices. In response, colonists blocked all the company’s ships from colonial ports, except in Boston. There colonists dressed asNative Americans dumped the British tea into Boston Harbor—the Boston Tea Party.

G. Parliament responded with the Coercive Acts, which restricted colonists’ rights.

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The Birth of a Democratic Nation (pages 33–38)

Did You Know? Independence Day was first celebrated inPhiladelphia on July 8, 1776, and has been celebrated acrossthe nation ever since. Congress declared July 4 the official nationalholiday in 1941. In the early days, fireworks and the firing ofguns caused many deaths each year. As a result, in the 1900s,many cities and states outlawed the sale of fireworks.

Discussion QuestionWhat name did the colonists give to the Coercive Acts, and why? (The colonistscalled the Coercive Acts the “Intolerable Acts” because these laws restricted the colonists’rights, including the right to trial by jury. The laws also allowed British soldiers to search,and even move into, colonists’ homes.)

II. Movement Toward Independence (pages 35–36)

A. The colonies sent delegates, or representatives, to a meeting in Philadelphia knownas the First Continental Congress. They demanded that King George III restore theirrights. The king responded with force.

B. The Revolutionary War began with battles at Lexington and Concord. Colonists started to question their loyalty to Britain. They began talking about independence,or self-reliance and freedom from outside control.

C. At the Second Continental Congress, some delegates wanted independence. Othersstill felt loyal to Britain. Thomas Paine’s pamphlet Common Sense swayed public opinion toward independence. Finally, the Second Continental Congress agreed.

Discussion QuestionWhy did some members of the Second Continental Congress oppose indepen-dence? (Some believed the colonists could never win a war against Great Britain. Otherswere still loyal to their home country.)

III. The Declaration of Independence (pages 36–38)

A. The Declaration of Independence, written mostly by Thomas Jefferson, explained whythe United States should be a free nation. It argued that the British government didnot look after the interests of the colonists. It listed many abuses by the king.

B. The Declaration said that the purpose of government is to protect the rights of thepeople. Government is based on consent of the people. If it disregards their rights or their will, the people are entitled to change or overthrow it.

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C. These ideas were influenced by philosopher John Locke. He saw government as acontract between the people and the rulers. The people agree to give up some free-doms and abide by government decisions. In return, the government promises toprotect them and their liberty. If it misuses its power, the people should rebel.

D. The Second Continental Congress approved the Declaration on July 4, 1776. Truefreedom arrived when Britain officially recognized the United States at the war’s end.

Discussion QuestionWhat are some ideas that the authors of the Declaration of Independence adoptedfrom the writing of John Locke? (The Declaration included Locke’s ideas that govern-ment is based on the consent of the people, the purpose of government is to protect the rightsof the people, and if it does not fulfill this purpose, the people have a right to overthrow it.The Declaration also included Locke’s idea that all people should equally enjoy the rights oflife, liberty, and property.)

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I. Early State Constitutions (pages 39–40)

A. New Hampshire was the first colony to organize as a state and craft a written plan forgovernment, or constitution. Other states formed similar systems of government.

B. Most state legislatures were bicameral—divided into two parts, or houses. Membersof the two houses were chosen by different methods.

C. Each state had an elected governor to carry out the laws and judges and courts tointerpret the laws.

D. Most state constitutions included a bill of rights.

E. The Massachusetts constitution was different from the others. It distributed powermore evenly among the legislature, governor, and courts. It gave the governor andthe courts the authority to check the legislature. The constitution itself was not creat-ed by the legislature but by a convention of elected delegates.

F. The Massachusetts constitution would later become the model for the U.S.Constitution.

Discussion QuestionUnder the state constitutions, what were the jobs of the legislature, the governor,and the courts? (The legislature created the laws, the governor carried out the laws, andthe courts interpreted the laws.)

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The Nation’s First Governments (pages 39–42)

Did You Know? The Articles of Confederation gave both theContinental Congress and the states the right to print money. Thepaper money issued by Congress were called continentals. To payits growing war debts, Congress printed more and more continen-tals. As a result, the money became nearly worthless. Americansbegan to refer to any useless thing as “not worth a continental.”

II. The Articles of Confederation (pages 40–42)

A. Separately, the states could not maintain a large army to fight the British. For this and other reasons, the Second Continental Congress made a plan for union called theArticles of Confederation. A confederation is a group of individuals who bandtogether for a common purpose.

B. The Articles set up a one-house legislature. As a result of bad experiences with theBritish government, the states refused to give Congress the power to tax or to enforceits laws. Congress could not require the states to give money or do anything else.

C. The states ratified, or approved, the Articles. Soon, serious problems became clear.Strict voting requirements to pass laws or amend (change) the Articles made it diffi-cult for Congress to accomplish anything. Even when it passed laws, Congress couldnot enforce them. States could just ignore the laws.

D. The Treaty of Paris was signed in 1783, ending the Revolutionary War.

E. Unable to collect taxes, Congress had borrowed to pay for the war. The states had also run up deep debts. To pay their debts, the states overtaxed their citizens and eventaxed goods from other states and foreign countries. The Confederation Congress hadno power to solve these problems.

F. Daniel Shays, an indebted farmer, felt the state had no right to take his farm awaybecause of a problem the state had created. He led an uprising, known as Shays’sRebellion. This unrest swayed leaders toward revising the Articles of Confederation to create a stronger national government.

Discussion QuestionWhat problems did the tax practices of the states cause for their citizens after the Revolutionary War? (To pay their deep debts, state governments taxed their citizensheavily, driving many farmers out of business and sparking widespread resentment. Thestates also taxed goods from other states and foreign countries, hurting trade.)

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I. A Distinguished Gathering (pages 52–53)

A. Each state except Rhode Island sent delegates to Philadelphia to fix the flaws in theArticles of Confederation.

B. Most of the 55 men were well-educated and experienced in politics. NativeAmericans, African Americans, and women were not included.

C. Benjamin Franklin was the oldest delegate at 81. He was a diplomat, writer, inventor,and scientist. Two delegates—George Washington and James Madison—would laterbecome presidents.

D. Thomas Jefferson and John Adams could not attend. They were in Europe as repre-sentatives of the United States government. Patrick Henry opposed the conventionand did not attend.

Discussion QuestionDescribe the political experience of the delegates. (Among the 55 delegates, 8 hadsigned the Declaration of Independence, 7 had been governors of their states, and 41 were or had been members of the Continental Congress.)

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The Road to the Constitution (pages 52–54)

Did You Know? Benjamin Franklin wrote and published an almanac every year from 1733 to 1758. The wise and wittysayings Franklin sprinkled through each issue helped to makePoor Richard’s Almanac one of the most popular publications of its time. Many of his sayings are still familiar today: “A pennysaved is a penny earned.” “Early to bed and early to rise, makesa man healthy, wealthy, and wise.” “God helps them that helpthemselves.”

II. Early Decisions (pages 53–54)

A. The delegates chose George Washington to preside. Washington chose a committee toset rules for conducting the convention.

B. The committee decided that decisions would be made by majority vote, with eachstate having one vote. Delegates agreed to keep all discussions secret to enable all tospeak freely.

C. No formal records were kept. Most of what we know comes from James Madison’spersonal notebook of events.

D. The delegates decided to discard the Articles of Confederation and write a new consti-tution. Thus the meeting came to be known as the Constitutional Convention.

Discussion QuestionWhy did the delegates decide to keep all discussions secret? (The secrecy rule enabledthe delegates to speak freely, without worrying about the public’s reaction. That made it easierfor them to compromise and change their minds on debated issues.)

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I. Two Opposing Plans (pages 55–56)

A. James Madison designed the Virginia Plan. It called for a government with threebranches: the legislative branch (lawmakers), executive branch (to carry out thelaws), and judicial branch (a system of courts to interpret and apply the laws). Thelegislature would have two houses, with the states represented by basis of populationin each.

B. The Virginia Plan appealed to the large states. The small states feared a governmentdominated by large states would ignore their interests.

C. The New Jersey Plan also called for three branches of government. The legislaturewould have one house and each state would get one vote. This plan would give equalpower to large and small states.

Discussion QuestionWhy did large states favor the Virginia Plan and small states favor the New JerseyPlan? (The Virginia Plan would create a government dominated by the large states becausethe states would be represented by basis of population in the legislature. In the New JerseyPlan, each state would get one vote in the legislature, giving equal power to large and smallstates.)

II. Constitutional Compromises (pages 56–58)

A. Roger Sherman’s committee proposed a Senate and a House of Representatives. Eachstate would have equal representation in the Senate. Representation in the Housewould be based on population. The delegates accepted this Great Compromise.

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Creating and Ratifying the Constitution (pages 55–59)

Did You Know? To push for ratification, Alexander Hamilton,James Madison, and John Jay wrote a series of 85 letters to news-papers. They signed the letters “Publius.” They did not argue that theConstitution was perfect, but that it was the best document on whichmost could agree. These letters, later published in book form as TheFederalist, swayed public opinion toward accepting the Constitution.The Federalist papers are still used today to help interpret theConstitution.

B. Southern states wanted to count enslaved African Americans as part of their popula-tion in determining representation in the House. Northern states opposed this plan. In the Three-fifths Compromise, delegates agreed that every five enslaved personswould count as three free persons for determining congressional representation andfiguring taxes.

C. Northern states wanted Congress to be able to regulate foreign trade and tradebetween the states. Southern states feared Congress would then tax their exports andstop the slave trade. They agreed to give Congress the power to regulate trade, but itcould not tax exports or interfere with the slave trade before 1808.

D. Delegates disagreed on whether Congress or the voters should choose the president.The solution was the Electoral College, a group of people named by each state legis-lature to select the president and vice president. Today, the voters in each state, notthe legislators, choose electors.

Discussion QuestionWhy did the Southern states at first oppose giving Congress the power to regulatetrade? (If Congress taxed exports, the Southern economy would suffer because it dependedheavily on exports of tobacco, rice, and other products. If Congress stopped the slave trade,Southern plantations would lose the source of labor on which they depended.)

III. Approving the Constitution (pages 58–59)

A. Ratification required at least 9 of 13 state conventions to vote “yes.”

B. Supporters of the Constitution called themselves Federalists to emphasize that theConstitution would create a system of federalism, a form of government in whichpower is divided between the federal, or national, government and the states.Federalists argued for a strong central government.

C. Opponents, the Anti-Federalists, wanted more power for the states and less for thenational government. They also wanted a bill of rights to protect individual freedoms.

D. Both agreed to add a bill of rights. This promise turned the tide. The Constitution tookeffect when New Hampshire became the ninth state to ratify it.

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Discussion QuestionWhy did the Anti-Federalists oppose the Constitution? (They felt it gave too muchpower to the national government and took too much away from the states. They also felt it needed a bill of rights to protect certain individual liberties, such as the freedom of speechand religion.)

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I. The Constitution and Its Parts (pages 82–85)

A. The main purpose of the Constitution is to provide a framework for government, butit is also the highest authority in the nation. The powers of all branches come from it.It has three main parts: the Preamble, seven articles, and amendments.

B. The Preamble states the goals and purposes of government. The first part makesclear that government gets its power from the people and exists to serve them.

C. The Preamble states six purposes: “To form a more perfect Union,” “To establishJustice,” “To insure domestic Tranquility,” “To provide for the common defense,” “To promote the general Welfare,” and “To secure the Blessings of Liberty to ourselvesand our Posterity.”

D. The articles explain how government is to work. The first three articles describe thepowers and responsibilities of the three branches of government.

E. Article I describes the legislative branch as two houses with lawmaking authority. It then describes how members will be chosen. The article also lists specific powersCongress does and does not have.

F. Article II establishes the executive, or law-enforcing, branch headed by a presidentand vice president. It explains how these leaders will be elected and can be removed,and describes their powers and duties.

G. Article III establishes the judicial branch to interpret and apply the laws. It calls forone Supreme Court plus lower courts and describes the powers of federal courts.

H. Article IV says that all states must respect one another’s laws and explains the processof creating new states. Article V specifies how the Constitution can be amended.Article VI declares that the Constitution is the “supreme Law of the Land” and federallaw prevails over state law. Article VII states that the Constitution would take effectwhen nine states ratify it.

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The Structure of the Constitution (pages 82–87)

Did You Know? In 1923, a group called the NationalWomen’s Party succeeded in bringing an amendment beforeCongress. The Equal Rights Amendment (ERA) stated that,“Equality of rights under the law shall not be denied or abridgedby the United States or any state on account of sex.” After yearsof nationwide debate, Congress passed the ERA in 1972. In theend the ERA fell 3 states short of the 38 needed for ratification.It never became law.

Discussion QuestionWhat are some powers that Article I grants to Congress? (Article I says that Congresswill have all lawmaking authority. It also gives Congress the power to collect taxes, regulateforeign and interstate trade, coin money, and declare war.)

II. Amending the Constitution (pages 85–86)

A. An amendment is any change to the Constitution. The first 10 amendments are theBill of Rights. The Sixteenth Amendment allows Congress to collect an incometax—a tax on people’s earnings.

B. The Framers made sure that the Constitution could not be altered without over-whelming support of the people. Only 27 amendments have become law.

C. The amendment process involves two steps: proposal and ratification. An amendmentmay be proposed by a vote of two-thirds of both houses of Congress or by a nationalconvention requested by two-thirds of the state legislatures.

D. Once proposed, an amendment must be ratified by three-fourths of the states. Thestates can do this by a vote of either the state legislature or a special state convention.

Discussion QuestionWhy did the Framers make the amendment process difficult? (After months of debateand compromise, the Framers knew how delicately balanced the Constitution was. Changingeven a small detail could have dramatic effects throughout the government. They wanted tomake sure the Constitution could not be altered without the overwhelming support of the people.)

III. Interpreting the Constitution (pages 86–87)

A. The Constitution is a general document and open to interpretation.

B. Article I gives Congress the power “to make all Laws which shall be necessary andproper” to carry out its duties. This necessary and proper clause allows Congress toexercise implied powers not specifically listed in the Constitution.

C. Americans disagree on what laws are “necessary and proper.” Loose interpretersbelieve Congress can make any laws not specifically forbidden. Strict interpretersbelieve Congress can make only the kinds of laws mentioned by the Constitution.

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D. The Supreme Court has the final authority on interpreting the Constitution. Eachnew interpretation, whether strict or loose, changes our government.

E. Actions by Congress and the president have also caused new interpretations. Forexample, the president requests legislation from Congress. This action is not directedby the Constitution.

F. Custom also changes the interpretation of the Constitution. For example, political parties, not mentioned in the Constitution, are part of today’s political system.

Discussion QuestionWhen William Henry Harrison died in office, Vice President John Tyler took theoath as president. Why was this action an interpretation of the Constitution? (Inthis situation, the Constitution was not clear about whether the vice president should becomepresident or merely act as president until the next election. When Tyler took the oath, heinterpreted the Constitution to mean that he should become president. Later the Twenty-fifthAmendment made his action officially part of the Constitution.)

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I. Popular Sovereignty (pages 89–90)

A. The Framers had a common vision for the government: It should be representative ofthe people and limited in scope. Power should be divided among different levels.

B. To achieve these ends, the Framers embraced five principles as the backbone of theConstitution: popular sovereignty, rule of law, separation of powers, checks and bal-ances, and federalism.

C. Article IV guarantees a republic, in which supreme power belongs to the people (popular sovereignty). The people express their will through elected representa-tives. Provisions, such as those about the right to vote, ensure popular sovereignty.

Discussion QuestionWhat does “popular sovereignty” mean? (Popular sovereignty is the notion that powerlies with the people. Taken apart, “sovereignty” means the right to rule and “popular,” inthis case, means the population or public.)

II. Rule of Law (page 90)

A. The Framers believed the government should be strong but not too strong.

B. The Constitution sets limits by stating what government may and may not do.Government is also limited by the rule of law. This means that the law applies to everyone, even those who govern.

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Principles Underlying the Constitution (pages 89–93)

Did You Know? Two great American leaders died on the sameday: Thomas Jefferson and John Adams died on July 4, 1826. Thetwo men did not always see eye to eye. Jefferson believed that, aspresident, Adams had gone too far in strengthening the nationalgovernment. Still, the two men were bound together by their sharedexperiences in helping to found a new nation.

Discussion QuestionHow does the rule of law limit government? (The rule of law means that no one isabove the law, even government leaders. No one may break the law or escape its reach.)

III. Separation of Powers (page 91)

A. To keep any one person or group from becoming too powerful, the Framers dividedgovernment into three branches with different functions.

B. This split of authority among the legislative, executive, and judicial branches is calledthe separation of powers.

Discussion QuestionWhat did French philosopher Baron de Montesquieu believe was the best way toprotect the liberty of the people? (He believed the best way was to clearly separate thelegislative, executive, and judicial functions and assign each to a separate governmentalbranch.)

IV. Checks and Balances (pages 91–92)

A. Checks and balances keep any one branch from becoming too powerful. Eachbranch can check, or restrain, the power of the others.

B. For example, the president can veto laws, Congress can block presidential appoint-ments, and the Supreme Court can overturn laws it finds contrary to theConstitution.

Discussion QuestionWhat are some ways that Congress can check the powers of the other branches?(Congress can block presidential appointments and treaties, control spending by the executivebranch, and, in cases of serious wrongdoing, remove the president from office. Congress canalso reject judicial appointments and remove unfit judges.)

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V. Federalism (pages 92–93)

A. Under federalism, power is shared by the national government and the states.Americans must obey the laws of both.

B. Enumerated or expressed powers are powers the Constitution specifically grants tothe national government. Powers not given to the national government are reservedpowers kept by the states. Powers that both levels of government can exercise areconcurrent powers.

C. When national and state laws conflict, the Constitution is the final authority. Neitherthe national nor state governments may act in violation of it.

D. The Constitution is both durable and adaptable. It provides the government sufficientpower to keep order, protect, and defend, yet sets limits to avoid tyranny.

Discussion QuestionWhat are some examples of concurrent powers? (Concurrent powers include the powerto enforce the laws, establish courts, collect taxes, borrow money, and provide for the generalwelfare.)

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I. First Amendment Freedoms (pages 98–100)

A. The Bill of Rights, added in 1791, protects our civil liberties—the freedoms we have to think and act without government interference or fear of unfair treatment.

B. The First Amendment protects five basic freedoms: religion, speech, press, assembly,and to petition the government.

C. Congress may not establish an official religion, favor one religion over another, ortreat people differently because of their beliefs. People may practice their faith as theywish.

D. In some countries, people can be jailed for criticizing the government or voicingunpopular ideas. We can say what we want, in public or in private, without fear ofpunishment. Freedom of speech includes conversations, radio, and TV. It also protectsforms of expression other than the spoken word, such as clothing.

E. We may express ourselves freely in print and other media. The government cannotpractice censorship—it cannot ban printed materials or films because they containoffensive ideas or ban information before it is published or broadcast.

F. We may gather in groups for any reason, as long as the assemblies are peaceful.Governments can make rules about when and where activities can be held but cannotban them. We may freely join clubs, political parties, unions, and other organizations.

G. We have the right to petition the government. A petition is a formal request. We cancomplain or express ideas by writing to our elected representatives.

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The First Amendment (pages 98–101)

Did You Know? In 1922, the movie industry set up a formof self-censorship. Movie studios established an organization toreview movie scripts and remove material it found offensive. In1968, the industry switched from censorship to a rating system.Instead of removing offensive content from scripts, the MotionPicture Association of America now rates films according to theages for which they are suitable. The ratings range from G, forgeneral—suitable for all ages, to NC-17—people under 17 notadmitted.

Discussion QuestionWhat forms of expression other than the spoken word are protected by freedom ofspeech? (Freedom of speech protects forms of expression such as Internet communication, art,music, and even clothing.)

II. Limits to First Amendment Freedoms (page 101)

A. The Supreme Court has decided that First Amendment freedoms may be limited toprotect safety and security. You may not provoke a riot. You may not speak or writein a way that leads to criminal activities or efforts to overthrow the government.

B. You should use civil liberties responsibly and not interfere with the rights of others.You may criticize government officials but not spread lies that harm a person’s reputation. Doing so is a crime called slander if the lies are spoken and libel if theyare printed.

C. Unlimited freedom is not possible in a society. The rights of one individual must bebalanced against the rights of others and of the community.

Discussion QuestionGive some examples in which exercising freedom of speech might interfere withthe rights of others. (You may talk with your friends in the street, but you must not block traffic. You may campaign for causes but not disturb your neighbors with blaring loudspeaker broadcasts. You may criticize government officials but not spread lies.)

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I. Protecting the Rights of the Accused (pages 103–106)

A. The Fourth, Fifth, Sixth, and Eighth Amendments protect the rights of accused people.

B. The Fourth Amendment protects against unreasonable searches and seizures. If policebelieve you have committed a crime, they can ask a judge for a search warrant—acourt order allowing law enforcement officials to search a suspect’s home or businessand take evidence. Search warrants are granted only with good cause.

C. The Fifth Amendment states that no one can be put on trial for a serious federalcrime without an indictment—a formal charge by a group of citizens called a grandjury, who review the evidence. An indictment does not mean guilt—it indicates onlythat the person may have committed a crime.

D. The Fifth Amendment also protects against double jeopardy. Someone tried andjudged not guilty may not be put on trial again for the same crime.

E. The Fifth Amendment protects an accused person’s right to remain silent. This prevents a person from being threatened or tortured into a confession.

F. The Fifth Amendment states that no one may be denied life, liberty, or property without due process, or the use of established legal procedures.

G. The Fifth Amendment limits eminent domain—the right of government to take private property (usually land) for public use.

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Other Guarantees in the Bill of Rights (pages 103–107)

Did You Know? On TV police dramas, you will often hearthe arresting officer say, “You have the right to remain silent. . . .”Police in real life make these statements as a result of theMiranda rule. Ernesto Miranda confessed to the serious crimes of which he was accused. His confession was then used to con-vict him. His appeal went all the way to the Supreme Court. Inthe 1966 case Miranda v. Arizona, the Court drew on the Fifthand Sixth Amendments. It ruled that nothing the accused say can be used against them at trial unless the police first advisethem of their rights as accused people.

H. The Sixth Amendment requires accused people to be told the charges against themand guarantees a trial by jury unless the accused chooses a judge instead. Trials mustbe speedy and public with impartial jurors. Accused people have a right to hear andquestion witnesses against them and call witnesses in their own defense. Accusedpeople are entitled to a lawyer.

I. Before trial, the accused may stay in jail or pay bail, a security deposit. Bail isreturned if the person comes to court for trial but is forfeited if the person fails toappear. The Eighth Amendment forbids excessive bail and excessive fines. It also for-bids cruel and unusual punishment. Punishment must fit the severity of the crime.

Discussion QuestionWhat is the function of a grand jury? (A grand jury reviews evidence against theaccused. If the jury judges from the evidence that the accused may have committed a crime, it issues an indictment. This process protects people from being brought to trial hastily andperhaps needlessly.)

II. Protecting Other Rights (pages 106–107)

A. The Second Amendment is often debated. Some believe it only allows states to keepan armed militia, or local army. Others believe it guarantees the right of all citizens to“keep and bear arms.” The courts have generally ruled that government can pass lawsto control, but not prevent, the possession of weapons.

B. The Third Amendment says that soldiers may not move into private homes withoutthe owners’ consent, as British soldiers had done in colonial times.

C. The Seventh Amendment concerns civil cases—lawsuits involving disagreementsamong people rather than crimes. It guarantees the right to a jury trial in civil casesinvolving more than $20. It does not require a jury trial, however.

D. The Ninth Amendment says that citizens have other rights beyond those listed in theConstitution.

E. The Tenth Amendment says that any powers the Constitution does not specificallygive to the national government are reserved to the states or to the people. This pre-vents Congress and the president from becoming too strong. They have only thepowers the people give them.

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Discussion QuestionWhat gives us the right to privacy in our homes and freedom from governmentinterference in our personal choices? (The Constitution does not mention privacy.However, the Ninth Amendment says that we have rights beyond those listed in theConstitution. The Supreme Court has drawn on the First, Fourth, and Fifth Amendments to uphold the right to privacy.)

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I. Protecting All Americans (pages 109–112)

A. At first, the Bill of Rights applied only to adult white males. It also applied only to thenational government, not to state or local governments. Later amendments and courtrulings made the Bill of Rights apply to all people and all levels of government.

B. The Civil War amendments—the Thirteenth, Fourteenth, and Fifteenth—extendedcivil liberties to African Americans.

C. The Thirteenth Amendment outlawed slavery, freeing thousands of AfricanAmericans.

D. After the Civil War, many Southern states passed “black codes” that limited the rightsof African Americans. The Fourteenth Amendment remedied this situation by defin-ing citizens as anyone born or naturalized in the United States, which includedAfrican Americans. It required all states to grant citizens equal protection of the laws.

E. The Fourteenth Amendment also nationalized the Bill of Rights by forbidding stategovernments from interfering with the rights of citizens. The Supreme Court upheldthis interpretation of the amendment in Gitlow v. New York.

F. The Fifteenth Amendment says that no state may take away a person’s voting rightson the basis of race, color, or previous enslavement. It was intended to guarantee suffrage—the right to vote—to African Americans. It applied only to men.

G. According to the Constitution, state legislatures were to choose senators. TheSeventeenth Amendment changed this to allow voters to elect senators directly.

H. The Constitution did not grant or deny women the right to vote. As a result, statesmade their own decisions. The Nineteenth Amendment solved this problem by estab-lishing women’s right to vote in all elections.

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Extending the Bill of Rights (pages 109–112)

Did You Know? In 1848, Elizabeth Cady Stanton, alongwith Lucretia Mott, organized the first women’s rights conventionin Seneca Falls, New York. Stanton called on the women to pushfor the right to vote. It was a long fight. In 1878, Stanton per-suaded a California senator to sponsor a woman suffrageamendment. It was reintroduced in Congress every year until1919, when it finally passed. It became law in 1920 as theNineteenth Amendment.

I. Because Washington, D.C., is a district, not a state, its citizens could not vote in national elections. The Twenty-third Amendment established their right to vote.

J. Several Southern states required people to pay poll taxes to vote. Because manyAfrican Americans and poor whites could not afford to pay, they could not vote. The Twenty-fourth Amendment outlawed poll taxes.

K. The Twenty-sixth Amendment guaranteed the right to vote to citizens 18 and older.Before this amendment, most states set the minimum voting age at 21.

Discussion QuestionWho benefits from the “equal protection” clause of the Fourteenth Amendment?(The equal protection clause benefits not only African Americans for whom it was intended,but in recent years it has also been used to benefit women, people with disabilities, and othergroups whose rights have not always been recognized.)

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I. Background of the Struggle (pages 113–115)

A. After the Civil War, African Americans routinely faced discrimination, or unfairtreatment based on prejudice against a certain group. The social separation of theraces was known as segregation. It would take more than 100 years for AfricanAmericans to secure their civil rights—the rights of full citizenship and equalityunder the law.

B. The National Association for the Advancement of Colored People (NAACP) workedthrough the courts to challenge laws that denied African Americans their rights.

C. The National Urban League helped improve opportunities for African Americans incities.

D. These groups and others built a civil rights movement. It made an important gainwhen President Harry Truman ordered an end to segregation in the armed forces.

E. In Brown v. Board of Education of Topeka, Kansas, NAACP lawyers successfully arguedthat segregation in public schools was unconstitutional. It violated the FourteenthAmendment’s principle of equal protection under the law.

F. Dr. Martin Luther King, Jr., was a main leader of the civil rights movement. Hebelieved in nonviolent resistance. He helped organize marches and boycotts. Heinspired thousands with his “I Have a Dream” speech about hopes for racial equalityand harmony.

G. African American students staged “sit-ins” at lunch counters that served only whites.White and African American “Freedom Riders” rode buses together to protest segrega-tion. Such protests were met with violence by whites.

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The Civil Rights Struggle (pages 113–115)

Did You Know? One day in 1955, Rosa Parks, an AfricanAmerican, was riding a bus in Montgomery, Alabama. She wasseated in the middle of the bus. Whites occupied all the frontrows. A white man got on the bus and wanted her seat, and thelaw required her to give it to him. She refused and was arrested.Her brave action touched off a boycott that fueled the civil rightsmovement. For a little over a year, African Americans refused toride Montgomery buses to protest the law. The boycott endedwhen the Supreme Court declared segregation on city buses to be unconstitutional.

H. The Civil Rights Act of 1964 prohibited discrimination in public facilities, employ-ment, education, and voter registration. It banned discrimination by race, color,gender, religion, and national origin.

I. The Twenty-fourth Amendment outlawed poll taxes. The Voting Rights Act of 1965further protected access of minorities to the polls.

Discussion QuestionDescribe types of discrimination that African Americans faced after the Civil War,especially in the South. (African Americans were barred from attending the same schoolsas white students. They had to ride in the back of buses, sit in separate sections of restaurantsand theaters, and stay in separate hotels. They even had to use separate public restrooms andwater fountains.)

II. Ongoing Challenges (page 115)

A. Affirmative action programs were intended to make up for past discrimination.They encouraged the hiring and promoting of minorities and women, and the admission of more minority students to colleges.

B. Critics complained that affirmative action programs gave preferential treatment to women and minorities, amounting to discrimination against men and whites.

C. The struggle for equal rights continues. Many Americans are subject to racial profiling—being singled out as suspects because of the way they look. Some become victims of hate crimes.

Discussion QuestionWhat are hate crimes? (Hate crimes are acts of violence based on a person’s race, color,national origin, gender, or disability.)

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I. A Citizen’s Legal Duties (pages 120–121)

A. Each of us belongs to many communities. As community members, we have responsibilities—things we should do or obligations that we fulfill voluntarily.

B. We also have duties—things we are required to do. We must fulfill duties required by national, state, and local governments or face fines or imprisonment.

C. Obey the law. Laws serve specific purposes, such as to help people get along, preventaccidents, and see that resources are used fairly.

D. Pay taxes. Government uses tax money to pay police, pave roads, maintain armedforces, and other activities. Income taxes are a percentage of what people earn. Peoplealso pay taxes on the sale of goods and services and on property.

E. Defend the nation, if called. In the United States, all men aged 18–25 must registerwith the government in case the country needs to draft, or call up, men for militaryservice. Service is currently voluntary.

F. Serve in court, if called. Every adult citizen must be prepared to serve on a jury or as a witness at a trial if called to do so.

G. Attend school. Most states require young people to attend school until age 16.

Discussion QuestionHow does staying in school benefit you and the government? (You need knowledgeand skills to make wise decisions, and our democratic system of government needs informedcitizens to operate well. In school, you not only gain an understanding of different subjectsbut you also learn to think through problems, form opinions, and express your views clearly.)

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The Duties and Responsibilities of Citizenship(pages 120–124)

Did You Know? Many Americans serve their country byjoining the National Guard. Members of the Guard are not full-time soldiers. They hold regular jobs during the week and receivemilitary training on some weekends. Each year, they receive twoweeks of extra training. The Guard serves as a reserve force. Intimes of war or civil unrest, however, the government may callthe National Guard to active duty.

II. Civic Responsibilities (pages 122–124)

A. Be informed. Know what the government is doing so that you can voice your opin-ion. You can learn about issues and leaders by reading print publications, listening tonews on the radio or TV, talking to people, and searching the Internet. Also, knowyour rights.

B. Speak up and vote. Government exists to serve you, but you must make your concerns known. Call, write, or send e-mail to your elected representatives. Join a political party or work for a cause. Above all, vote.

C. Study candidates and issues before marking your ballot. If the performance of anelected leader falls short, vote for someone else in the next election. Voting ensures a peaceful and orderly change of leadership.

D. Respect others’ rights. Respect public property and the property of others. Vandalismand littering are not only disrespectful, but are also crimes.

E. Respect diversity. Although you may disagree with people or disapprove of theirlifestyles, they have an equal right to their beliefs and practices. Tolerance meansrespecting and accepting others, regardless of their beliefs, practices, or differences.Diversity is a strength. All citizens are equal and entitled to be treated the same.

F. Contribute to the common good. Contribute time, effort, and money to help othersand to improve community life. Be an active participant in your community.

Discussion QuestionWhy should you be tolerant of others? (Although you may disagree with people or disapprove of their lifestyles, they have an equal right to their beliefs and practices. Treatingothers politely and respectfully is part of being a good citizen.)

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I. The Need for Citizens’ Involvement (pages 125–127)

A. Americans do volunteer work to help make their communities better places to live. A community is a group of people who share the same interests and concerns. Manyvolunteers are students in grades 6 through 12.

B. Governments provide for many needs, but their resources are limited. Also, they arebureaucracies—complex systems with many departments, rules, and people in thechain of command. Thus, governments cannot respond quickly to social problems.

C. Good citizens are concerned about the welfare—the health, prosperity, and happi-ness—of all members of the community.

D. Some ways people participate in the community include leading a scout troop, mentoring schoolchildren, visiting a nursing home, and collecting canned goods.

E. Volunteerism is the practice of offering your time and services to others withoutpayment. Many Americans also contribute money to charity.

F. Many companies also believe in giving something back to the community. They maysponsor a recreational sports team, donate prizes for charity fund-raisers, contributemoney to build a public swimming pool, or offer college scholarships to students.

Discussion QuestionWhat are some ways you could contribute to your community? (People contribute totheir communities in countless ways. You and your fellow students might visit nursing homepatients, volunteer at an animal shelter, or collect canned goods for a local food pantry.)

II. Volunteers in Action (pages 127–130)

A. People are more likely to participate when they feel a personal connection to a cause or know others involved.

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Volunteering in Your Community (pages 125–130)

Did You Know? Habitat for Humanity is a volunteer organi-zation that builds houses for the poor both inside and outside theUnited States. Student volunteers age 18 or older can learn newskills while earning educational awards. Former President JimmyCarter has worked with Habitat as a volunteer carpenter since themid-1980s.

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B. Many charities are local and focus on one or two projects. Others are large, nationalorganizations with varied activities. All depend on ordinary people to give their time.

C. More than half the country’s schools arrange community service for students ingrades 6 through 12. Many require it.

D. The federal government has created national volunteer programs. Americans in thePeace Corps help people in the poorest corners of the world. Volunteers inAmeriCorps and the Senior Corps serve within the United States.

E. AmeriCorps members might help disaster victims, clean up polluted rivers, or assistpeople with disabilities. In exchange, they receive a living allowance and money tohelp pay for college.

F. Americans aged 55 and older can volunteer through the Senior Corps. They take partin three main programs: Foster Grandparents for children with special needs, SeniorCompanions for other seniors, and the Retired and Senior Volunteer Program inwhich they might serve Meals on Wheels or do other neighborhood activities.

G. The new USA Freedom Corps brings together the Peace Corps, AmeriCorps, andSenior Corps, plus a new component called Citizen Corps.

Discussion QuestionWhat kinds of things do Peace Corps volunteers do? (Peace Corps volunteers haveserved in 135 countries, where they advise farmers, teach children, dig wells, help start small businesses, and fight the spread of AIDS and other serious diseases.)

III. The Benefits of Volunteering (page 130)

A. By banding together to serve the community, we really serve ourselves.

B. Benefits of volunteering: We make our communities better places to live for all of us.We gain opportunities to learn, make friends, and improve skills. We gain the satisfac-tion of knowing that we made a difference in someone else’s life.

Discussion QuestionWhat did Alexis de Tocqueville mean when he said volunteering is “self-interestrightly understood”? (He meant that, by banding together to serve the community, we really serve ourselves.)

I. Terms of Congress (page 138)

A. The Framers of the U.S. Constitution intended the legislative branch to be the mostpowerful branch.

B. Each term starts January 3 of odd-numbered years and lasts two years. Each term hastwo sessions.

C. Congress holds special sessions in times of crisis. A joint session occurs when bothhouses meet together, such as for the president’s State of the Union address.

Discussion QuestionHow are different terms of Congress identified? (Each “new” Congress is given a num-ber to identify its two-year term. For example, the first Congress met in 1789, and the 107thCongress began meeting in 2001.)

II. A Bicameral Legislature (pages 139–140)

A. The Great Compromise established Congress as a two-part, or bicameral, body.

B. The House of Representatives has 435 voting members, allotted to the states by popu-lation. After each census, or population count taken by the Census Bureau, Congressadjusts the number of representatives given to each state.

C. States are divided into districts, with one representative elected from each district. The states draw districts to include roughly the same number of constituents, or people represented. Some abuse the process by drawing a gerrymander, or oddlyshaped district designed to increase the voting strength of a particular group.

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How Congress Is Organized (pages 138–144)

Did You Know? The United States began its first census, orpopulation count, in 1790. The task lasted 18 months. Censustakers rode horseback around the country to count the widelyscattered population. Today, census takers do more than countpeople. They gather information about age, education, employ-ment, and income. They also collect information on housing,agriculture, transportation, and different industries. Governmentofficials use this information to study social and economic prob-lems and plan programs.

D. House members focus on the concerns of their district.

E. The Senate has 100 members—two from each state. Senators represent their entirestates. They serve six-year terms. Elections are staggered to ensure some stability.

Discussion QuestionMembers of the House of Representatives focus on the concerns of their district,rather than on the concerns of their state as a whole. Is this what the Framers ofthe Constitution intended? Explain. (Yes. In allotting House seats by population, theFramers designed Congress so that House members would be closer to the people than wouldmembers of the Senate.)

III. Congressional Leaders (pages 140–142)

A. In both houses, the political party to which more than half the members belong is the majority party. The other party is the minority party. Party members choosetheir leaders at the beginning of each term.

B. The Speaker of the House is the most powerful leader in the House ofRepresentatives. The Speaker always belongs to the majority party. The Speaker is incharge of floor debates and influences most House business. If something happened to the president and vice president, the Speaker would become president.

C. The leader of the Senate is technically the vice president, who rarely attends and votes only in case of a tie. The person who actually acts as chairperson is thepresident pro tempore. The majority party fills this mostly ceremonial position.

D. Powerful floor leaders try to make sure the laws Congress passes are in the best interest of their own party. They speak for their parties on the issues and try to swayvotes. Party “whips” help by keeping track of where their party members stand onissues and rounding them up for key votes.

Discussion QuestionHow does the Speaker of the House exercise influence? (Speakers today often influ-ence through persuasion. They talk with many members of Congress, listen to requests forfavors, and in return expect the representatives to support important issues.)

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IV. Committees: Little Legislatures (pages 142–144)

A. The detailed work of lawmaking is done in committees. Each house has permanentstanding committees that continue their work from session to session. Most aredivided into smaller subcommittees that deal with specialized issues.

B. Both houses also have select committees that are created to do a special job for a limited period. They disband after completing their task.

C. Joint committees include members of both houses. Temporary conference committees help the House and Senate agree on the details of a proposed law.

D. Members of Congress try to get assigned to important committees that affect the people who elected them. Party leaders make committee assignments based on members’ preferences, expertise, party loyalty, and seniority, or years of service.

E. Members with the most seniority usually get the preferred committee spots. The most senior members from the majority party traditionally become chairpersons.Chairpersons of standing committees are the most powerful members of Congress.

Discussion QuestionWhat are the main arguments for and against the use of the seniority system inchoosing committee members? (Some people think the seniority system prevents fightsover committee jobs and ensures that chairpersons will have experience. Others complain that talented people may be overlooked in favor of those who simply have been around for a while.)

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I. Legislative Powers (pages 146–147)

A. Article I, Section 8 of the Constitution lists Congress’s specific or expressed powers.Clause 18 gives Congress implied powers (not stated explicitly) to do whatever is“necessary and proper” to carry out the expressed powers. Clause 18 is often calledthe elastic clause because it allows Congress to stretch its powers to meet newneeds.

B. Congress has the power to collect taxes to pay for government and its services. All tax bills must start in the House of Representatives and be approved by the Senate.

C. Congress spends money by means of a two-step process. Authorization bills createprojects and set an amount to be spent on them. Appropriations bills actually pro-vide the money for each program. Congress must approve all government spending.

D. Article I, Section 8, Clause 3, the “commerce clause,” gives Congress the power toregulate foreign and interstate commerce. Laws dealing with air traffic, television, and air pollution are all based on this clause.

E. Only Congress can declare war. Congress has the power to create, maintain, and over-see an army and navy. The Senate must approve all treaties with other countries.

Discussion QuestionWhy did the Founders give Congress broad powers? (The Founders knew that theycould not foresee every situation Congress might face. They included the “necessary and proper” clause to allow Congress to stretch its powers to meet new needs.)

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The Powers of Congress (pages 146–150)

Did You Know? After World War I, President WoodrowWilson envisioned an organization of nations dedicated to main-taining peace in the world. He designed a plan for the League ofNations. Other countries agreed with the plan, and the Leaguewas formed. President Wilson pushed hard for Senate approval,but the Senate would not agree to the terms. The Senate voted to reject the Treaty of Versailles, blocking the United States fromjoining the League of Nations.

II. Nonlegislative Powers (pages 148–149)

A. Congress has powers not related to making laws. It can propose constitutional amend-ments. It counts electoral votes in presidential elections. If no one receives a majority,the House picks the president and the Senate picks the vice president. If a presidentdies, resigns, or is too ill to serve, Congress settles the matter.

B. Congress has the power to check other branches. The Senate can approve or rejectthe president’s nominations for jobs such as Supreme Court justice, federal judge, and ambassador.

C. The House may impeach, or accuse officials of misconduct. If the majority of Housemembers vote to impeach, the matter goes to the Senate. A two-thirds vote in theSenate is required to remove the person from office.

D. Congress has taken on the role of overseeing government activities. Standing commit-tees review how well the executive branch has put laws into practice. Congressconducts special investigations that may lead to criminal charges or new laws to deal with the problem.

Discussion QuestionIf the House votes to impeach an official, is that person removed from office? (Notnecessarily. After the House votes to impeach, the Senate acts as the jury. A two-thirds vote inthe Senate is required to convict and remove the person from office.)

III. Limits on Power (page 150)

A. The Constitution imposes limits on Congress. It may not pass laws that violate the Bill of Rights. Article I says that Congress may not favor one state over another, taxinterstate commerce, or tax exports.

B. Congress cannot suspend the writ of habeas corpus. This is a court order thatrequires police to explain why they are holding a suspect.

C. Congress may not pass bills of attainder, or laws that punish a person without ajury trial. Congress may not pass ex post facto laws that make an act a crime afterthe act has been committed. Congress may not interfere with powers reserved for the states.

D. Other branches can check the power of Congress. The Supreme Court may declarelaws unconstitutional. The president can veto bills.

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Discussion QuestionDoes a president’s veto kill a bill, or can the bill become law anyway? (The bill canstill become law if Congress overrides the veto with a two-thirds vote.)

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I. Requirements and Benefits of Congress (pages 151–152)

A. Both senators and members of the House must live in the state they represent. Housemembers usually live in their districts, but are not required to do so. Senators must be at least 30 years old; House members, 25. Senators must have been citizens for atleast nine years; House members, seven years.

B. Most members of Congress have college degrees. Nearly half are lawyers.

C. Members receive a salary of $150,000, free office space, and trips to their home states.They have the franking privilege—they may send job-related mail for free.

D. The Constitution grants senators and representatives immunity, or legal protection, in some situations. They may not break the law, though.

Discussion QuestionWhat are some benefits that members of Congress enjoy? (Along with their $150,000salary, members of Congress receive free office space, parking, and trips to their home states.They have franking privileges and immunity in some situations. They have low-cost lifeinsurance and use of a gymnasium, special restaurants, and a medical clinic.)

II. Congressional Staff: Behind-the-Scenes Helpers (pages 152–153)

A. The personal staff run the offices. They gather information on issues, arrange meet-ings, and write speeches. They handle requests from voters. They deal with reportersand lobbyists—people hired by private groups to influence government decisionmakers. The staff works for the member’s reelection on their own time.

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Representing the People (pages 151–155)

Did You Know? Congress established the Library ofCongress in 1800 to provide research and reference materials formembers of Congress. Since then the library has expanded toserve other government agencies, scholars, and the public. It nowserves as a national library, but it remains a part of the legislativebranch. The president appoints the Librarian of Congress, withthe approval of the Senate.

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B. Members of Congress hire students from their home states or districts to serve asinterns and pages. Interns help with research and office duties. Pages deliver messagesand run errands.

C. Committee staffs generally have expert knowledge about special topics, such as taxesor defense. They draft bills, gather information, organize committee hearings, andnegotiate with lobbyists.

D. The Library of Congress provides information for members of Congress and theirstaffs. The Library’s Congressional Research Service looks up facts and spells out argu-ments for and against bills.

E. The General Accounting Office reviews spending activities of federal agencies, studiesprograms, and recommends ways to spend taxpayers’ dollars wisely.

F. The Congressional Budget Office provides information and analyses to help Congresscreate a budget. It estimates costs and economic effects of programs.

Discussion QuestionHow could you benefit from serving as a congressional intern or page? (This experience gives young people a firsthand look at the political process.)

III. Members of Congress at Work (pages 153–155)

A. Congressional sessions begin each January 3. In representing the people who electedthem, members of Congress carry out three major jobs.

B. Congress members make laws. They introduce bills, work on committees, listen to input for and against bills, and then vote.

C. Congress members do casework—they troubleshoot for people from their home district or state who request help in dealing with the federal government.

D. Congress members protect the interests of their state or district. For example, a senator from a state with strong timber industries might seek to influence loggingpolicies.

E. Members also work to gain a share of national government spending for their con-stituents. A government contract can bring a lot of money to local businesses and jobsfor local people. Government projects and grants that primarily benefit the home district or state are called pork-barrel projects.

Discussion QuestionWhat kinds of casework problems do congressional staffs solve? (Most problems constituents have involve the government bureaucracy. The staffs handle problems such as a Social Security check that doesn’t arrive or a veteran’s claim that is held up.)

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I. Types of Bills (pages 157–158)

A. Of the more than 10,000 bills introduced each congressional term, only several hundred become law.

B. Bills fall into two categories. Private bills concern individual people or places. Publicbills apply to the entire nation and involve general matters like taxation, civil rights,or terrorism.

C. Congress also considers different kinds of resolutions, or formal statements expressinglawmakers’ opinions or decisions. Many resolutions do not have the force of law.Joint resolutions are passed by both houses of Congress and do become law ifsigned by the president.

Discussion QuestionDescribe some ways in which Congress might use joint resolutions. (Congress usesjoint resolutions to propose constitutional amendments, to designate money for a special purpose, and to correct errors in bills already passed.)

II. From Bill to Law (pages 158–161)

A. Ideas for bills come from members of Congress, citizens, and the White House. Otherbills are suggested by special-interest groups, or organizations of people with somecommon interest who try to influence government decisions.

B. Only senators and representatives may introduce bills in Congress. Every bill is givena title and number, and is then sent to an appropriate standing committee.

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How a Bill Becomes a Law (pages 157–161)

Did You Know? The House and Senate chambers arehoused in the United States Capitol. This stately building sits on Capitol Hill near the center of Washington, D.C. The Capitol’s540 rooms contain art depicting important events and people inUnited States history. As a citizen, you can visit the Capitol andenjoy its beauty. With a pass from your senator or representative,you can even attend a session of Congress and watch your law-makers in action.

C. The committee chairperson decides which bills get ignored and which get studied.Those that merit attention are often researched by a subcommittee. Experts and citizens may voice opinions about a bill in public hearings or written statements.

D. Standing committees can (1) pass the bill without change, (2) mark changes and sug-gest that the bill be passed, (3) replace the bill with an alternative, (4) pigeonhole thebill (ignore it and let it die), or (5) kill the bill by majority vote. When a committee isagainst a bill, it almost never becomes law.

E. Bills approved in committee are put on the schedules to be considered by the fullHouse or Senate. The Senate usually takes up bills in the order listed. In the House,the Rules Committee can give priority to some bills and not let others get to the floor.

F. When bills reach the floor, members debate the pros and cons. The House acceptsonly relevant amendments. The Senate allows riders—completely unrelated amend-ments—to be tacked onto the bill.

G. The House Rules Committee puts time limits on the discussion. Senators may speak as long as they like and need not even address the topic at hand. Sometimes they filibuster, or talk a bill to death. A three-fifths vote for cloture can end a filibuster.

H. In a simple voice vote, those in favor say “Yea” and those against say “No.” In astanding vote, those in favor stand to be counted, and then those against stand.

I. The House uses a computerized voting system that records each representative’s vote.Senators voice their votes in turn as an official records them in a roll-call vote.

J. A simple majority of members present passes a bill. After passing one house, the billthen goes to the other. If either house rejects the bill, it dies.

K. Both houses must pass an identical bill. If either changes the bill it receives from the other house, a conference committee is formed to work out the differences. TheHouse and Senate must then either accept the revised bill as is or completely reject it.

L. After a bill passes both houses, it goes to the president. The president may sign it into law, veto (or refuse to sign) it, or do nothing for 10 days. Then if Congress is in session, the bill becomes law without the president’s signature. If Congress hadadjourned, the bill dies. Killing a bill this way is called a pocket veto. Congress canoverride a veto with a two-thirds vote of each house.

Discussion QuestionHow does a filibuster work? (A filibuster takes advantage of the Senate’s custom of allow-ing members to speak as long as they like on whatever topics they like. In a filibuster, onemember can hold the floor for hour after hour, delaying a vote until the bill’s sponsor givesup and withdraws the measure.)

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I. Qualifications for President (pages 166–167)

A. The president heads the executive branch—the top political job in the country andpossibly the world. George Washington was the first to hold the office.

B. To become president, a person must be: (1) at least 35, (2) a native-born Americancitizen, and (3) a resident of the United States for at least 14 years.

C. So far, every U.S. president has been a white male. All but one has been ProtestantChristian. Most have had a college education. Many were lawyers. Most came fromstates with large populations.

D. Things are changing. In recent decades, we’ve had a Catholic president (John F.Kennedy), a female vice-presidential candidate (Geraldine Ferraro), an AfricanAmerican contender for the Democratic nomination for president (Jesse Jackson), and a Jewish candidate for vice president (Joseph Lieberman).

Discussion QuestionThe president of the United States is generally considered to hold the most impor-tant job in the world. Why? (The job of U.S. president is generally considered the mostimportant in the world because of the power and global influence of the United States.)

II. Electing a President (page 167)

A. Presidential elections take place every four years in years evenly divisible by 4.

B. The Constitution set up an indirect method of election called the Electoral College.By marking their ballots for a particular candidate, voters are actually selecting their state’s electors. The electors are pledged to vote for the chosen candidate.

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The President and Vice President (pages 166–169)

Did You Know? The election of John F. Kennedy was dramatic evidence that the presidency was changing. He was notonly the first Catholic but also the youngest person to be electedpresident. In his Inaugural Address, Kennedy declared that lead-ership had passed “to a new generation of Americans.” Hechallenged Americans to be active citizens: “Ask not what yourcountry can do for you—ask what you can do for your country.”

C. Each state has as many electoral votes as the total of its members in Congress. Thismeans that states with larger populations have more electoral votes.

D. In almost all states, the winning candidate receives all the electoral votes, even if theperson wins by only a small majority. As a result, candidates focus their campaigns onstates with the most electoral votes. It takes 270 of the 538 electoral votes to win.

E. The media announces the winner the evening of the election. However, the outcomeis not official until the Electoral College casts ballots and Congress counts them.

Discussion QuestionYour ballot for president will show the names of all the candidates. When youselect one, are you voting directly for that person? Explain. (No. When you vote for acandidate, you are actually voting for a list of presidential electors pledged to that candidate.)

III. Term of Office (pages 167–168)

A. Presidents serve four-year terms. The Twenty-second Amendment limits each presi-dent to two elected terms, or a maximum of 10 years if the president took officeduring another president’s term.

B. The president receives a yearly salary of $400,000, plus expenses. The president livesand works at the White House. A staff tends to the needs of the president’s family.

C. Camp David, a beautiful estate in Maryland, serves as the president’s retreat and aplace to host foreign leaders. Presidents travel in special cars, helicopters, and air-planes, such as Air Force One.

Discussion QuestionBefore the Twenty-second Amendment, did most presidents serve more than twoterms? Explain. (No. Originally the Constitution placed no limits on how many terms apresident could serve. George Washington, however, chose to serve only two terms. All otherpresidents except one followed Washington’s example.)

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IV. The Vice President (page 168)

A. The vice president is elected with the president, and the qualifications are the samefor both jobs.

B. The vice president votes in the Senate in case of a tie, but otherwise has little authority.Yet if the president dies, is removed from office, becomes seriously ill, or resigns, thevice president becomes president.

Discussion QuestionA vice president’s activities rarely make headlines. Under what circumstanceswould a vice president suddenly become the focus of attention? (The rarely visiblevice president would suddenly become the focus of attention if the president became ill, died,or left office. The vice president would then become president.)

V. Presidential Succession (pages 168–169)

A. The Constitution was not clear about whether the vice president would become presi-dent or just take over the president’s duties if the president could no longer serve.Vice President John Tyler settled the question. He took the oath as president whenWilliam Henry Harrison died in office.

B. The Presidential Succession Act of 1947 established the line of succession. If both thepresident and vice president die or leave office, the Speaker of the House would benext, followed by the president pro tempore, and then the secretary of state.

C. Later the Twenty-fifth Amendment further established that the vice president, afterbecoming president, would choose another vice president. Both houses of Congressmust approve the choice.

D. The amendment gives the vice president a role in determining whether a president isdisabled and unable to do the job. The vice president would then act as presidentuntil the president is able to go back to work.

Discussion QuestionIf both the president and vice president die or leave office, who would be the next three people in the order of presidential succession? (The next three would bethe Speaker of the House, followed by the president pro tempore of the Senate, and then thesecretary of state.)

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I. Constitutional Powers (pages 171–172)

A. The president’s main job is to carry out the laws passed by Congress.

B. The Constitution gives the president power to veto, call Congress into special session,serve as commander in chief, and receive foreign officials. The president can maketreaties, appoint judges and top government officials, and pardon convicted criminals.

C. In the State of the Union address each year, the president informs Congress of impor-tant issues facing the nation and proposes new legislative programs.

Discussion QuestionWhy does the president give several speeches to Congress each year, including the State of the Union address? (The Constitution requires the president to give Congressinformation about the “state of the union.” These speeches fulfill that obligation.)

II. Roles of the President (pages 172–174)

A. As Chief Executive, the president is in charge of 14 cabinet departments and morethan 3 million government workers. The president appoints the heads of cabinetdepartments and large agencies, with Senate approval.

B. The president may not make laws but can issue executive orders—rules or commands that have the force of law.

C. The president can appoint federal judges, including Supreme Court justices. Thispower is important because the way the Supreme Court interprets laws greatly affects life in the United States. Most presidents appoint justices who share views similar to their own.

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The President’s Job (pages 171–174)

Did You Know? Although they are not laws, executiveorders issued by the president can have far-reaching impact. Onesuch executive order was the Emancipation Proclamation. Issuedby Abraham Lincoln in 1863, this proclamation freed all enslavedpersons in areas then controlled by the Confederacy. It alsoallowed African Americans to serve in the Union army and navy,which helped the Union win the Civil War.

D. The president may grant pardons, or declarations of forgiveness and freedom frompunishment. The president may issue a reprieve, an order to delay a person’s punishment until a higher court can hear the case. The president may also grantamnesty, a pardon toward a group of people.

E. The president directs foreign policy, deciding how the United States will act towardother countries.

F. As commander in chief, the president is in charge of all branches of the armed forces.Congress and the president share the power to make war. Only Congress can declarewar, but only the president can order soldiers into battle.

G. Congress has declared war only five times, yet presidents have sent troops into actionmore than 150 times. This situation may threaten the system of checks and balances.

H. After the undeclared Vietnam War, Congress passed the War Powers Act. This lawrequires the president to notify Congress immediately when troops are sent into bat-tle. The troops must be brought home after 60 days unless Congress approves a longerstay or declares war.

I. Only Congress may introduce bills, but the executive branch proposes most legisla-tion. All presidents have a legislative program that they want Congress to pass. Theymake speeches and talk to key members of Congress to build support for their pro-grams. The president’s staff works on the laws with members of Congress.

J. The president and Congress often disagree. One reason is that the president representsthe whole nation. Congress members represent only their state or district. Anotherreason is that the president can serve only two terms. Many Congress members winreelection many times and remain in office for decades. As a result, the presidentoften wants to move faster on programs than members of Congress do.

K. As head of state, the president hosts visiting foreign leaders and carries out ceremoni-al functions, such as giving medals to the country’s heroes.

L. As the country’s economic leader, the president must plan the federal budget and tryto deal with such problems as unemployment, rising prices, and high taxes.

M. The president is the leader of his or her political party. The party helps the presidentget elected. In return, the president gives speeches to raise money and help fellowparty members win office.

Discussion QuestionWhy is the power to appoint Supreme Court justices important to the president?(The Supreme Court has the final authority to determine whether a law is acceptable underthe Constitution. This power to interpret laws greatly influences life in the United States. As a result, presidents usually appoint justices who share views similar to their own.)

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I. The President and Foreign Policy (pages 175–178)

A. Foreign policy is a nation’s overall plan for dealing with other nations. The basicgoal of American foreign policy is national security, the ability to keep the countrysafe from attack or harm.

B. International trade is another goal and is vital to economic prosperity. Trade can create markets for American products and jobs for American workers.

C. A third goal is promoting world peace. Even distant wars can disrupt trade andendanger U.S. national security.

D. A fourth goal is to promote democracy and human rights around the world.

E. The executive branch includes a large foreign-policy bureaucracy. It includes the StateDepartment, Defense Department, Central Intelligence Agency, and National SecurityCouncil.

F. The president and Congress share the power to conduct foreign affairs. The presidentis the chief diplomat and commander in chief, but Congress has the power to declarewar, prohibit certain military actions, and spend—or withhold—money for defense.

G. The Constitution does not make clear how the executive and legislative branches canuse their powers. As a result, the branches compete for control of foreign policy.

H. Treaties are formal agreements between the governments of two or more countries.Some, such as NATO, are agreements among nations for mutual defense. The Senatemust approve a treaty by a two-thirds vote. However, the president can make anexecutive agreement with the leader of another country without Senate approval.

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Making Foreign Policy (pages 175–178)

Did You Know? The fight for independence was not goingwell when the young nation sent Benjamin Franklin to France.Franklin knew that an alliance with France could turn the tidetoward victory. French leaders were not quick to agree. Theyknew that a treaty would mean war with Britain. But Franklin’scharm, tact, and patience—along with a key American victory onthe battlefield—finally won them over. Franklin then arranged tokeep money, soldiers, and supplies flowing from France. Manyhistorians believe that the United States could not have defeatedBritain without Franklin’s efforts.

I. An ambassador is an official representative of a country’s government. The presidentappoints ambassadors, with Senate approval. Ambassadors are sent only to countrieswhere the United States accepts the government as legally in power.

J. The United States gives foreign aid in the form of money, food, military assistance, orother supplies to help other countries.

K. The president makes agreements with other nations about what products may betraded and the rules of trade. Sometimes the rules include trade sanctions, or effortsto punish another country by imposing trade barriers. Another punishing tool is theembargo—an agreement among a group of nations that prohibits them all from trading with the target nation.

L. Congress takes the lead in imposing tariffs on imported goods and in joining interna-tional trade groups. One such trade group is the North American Free TradeAgreement (NAFTA).

M. As commander in chief, presidents may use the military to carry out some foreign-policy decisions that could involve deploying armed forces or launching missileattacks. This powerful tool must be used with care.

Discussion QuestionWhat are four main goals of American foreign policy? (Four main goals are to protect national security and to promote international trade, world peace, and democracy.)

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I. Executive Office of the President (pages 179–181)

A. The employees of the Executive Office of the President (EOP) help the president bypreparing reports, helping to write bills, and checking the work of various agencies.

B. The people of the White House Office work directly for the president. About 10 to 12of these 500 people are the president’s closest advisers. They make up the WhiteHouse Staff. The most powerful is the chief of staff.

C. The White House Staff screens the flow of information and people to the president. Asa result, this group has a lot of power.

D. The Office of Management and Budget (OMB) prepares the federal budget and moni-tors government spending. The federal budget lays out the administration’s plans andgoals for the coming year.

E. The National Security Council helps the president coordinate the military and foreignpolicy. It includes the vice president, the secretaries of state and defense, and thechairman of the Joint Chiefs of Staff, a group made up of the top commander of eachof the armed services. The NSC supervises the Central Intelligence Agency (CIA).

F. George W. Bush created the Department of Homeland Security to deal with terroristactivities. It includes members of the cabinet and of agencies such as the FederalBureau of Investigation (FBI) and Border Patrol.

G. The three members of the Council of Economic Advisers advise the president aboutcomplex economic matters, such as employment, tax policy, inflation, and trade.

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Presidential Advisers and Executive Agencies(pages 179–185)

Did You Know? Early First Ladies limited their activities tothat of hostess and social role model. Eleanor Roosevelt, how-ever, extended the limits of what a First Lady could do. She wasa public figure in her own right. She traveled extensively andspoke on social issues. She served as Franklin’s unofficial adviser.The first president’s wife to hold regular press conferences,Eleanor allowed only women to attend to force news agencies tohire more female reporters.

Discussion QuestionWhy does the White House Staff have a lot of political power? (The White HouseStaff largely decides who and what gets through to the president. This function gives thegroup a lot of political power. Lawmakers and others know that to influence, or even speakwith, the president, they must go through the White House Staff.)

II. Cabinet (page 181)

A. The cabinet is a group of advisers that includes the heads of the 15 top-level executive departments. The head of the Department of Justice is called the attorneygeneral. The other department heads are called secretaries.

B. Cabinet members advise the president on issues related to their departments. Thepresident decides when the cabinet meets and how much to rely on their advice.

Discussion QuestionHow did the cabinet develop? (No mention of the cabinet appears in the Constitution.Instead, this body developed over the years through custom and usage. It started when GeorgeWashington began meeting regularly with department heads.)

III. The Vice President and the First Lady (page 182)

A. Most presidents have delegated little authority to their vice presidents, though this ischanging somewhat. Modern vice presidents have served on special advisory boards.They often visit foreign countries as representatives of the president.

B. The Constitution does not mention the president’s spouse. Many First Ladies, though,have served the country in useful ways. Today First Ladies have an office and staff inthe White House.

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Discussion QuestionHow has the role of the vice president changed in recent administrations? (Recentpresidents have tried to give their vice presidents more responsibility. Al Gore served as a closeadviser to Bill Clinton on environmental issues. Dick Cheney has advised George W. Bushclosely on foreign policy issues.)

IV. The Federal Bureaucracy (pages 182–185)

A. The executive branch is shaped like a pyramid. Directly below the president are thecabinet secretaries and their departments. At the next level are hundreds of agencies.Together, the agencies and employees of the executive branch are known as the federal bureaucracy. The workers are called bureaucrats, or civil servants.

B. These departments and agencies carry out government programs by performing threebasic jobs: (1) They develop procedures for putting new laws into practice. (2) Theyadminister day-to-day operations of the government. (3) They regulate, or police, various activities. In doing these jobs they help shape government policy.

C. Independent agencies are not part of the cabinet, but they are not independent ofthe president. The three types are: executive agencies, regulatory commissions, andgovernment corporations.

D. Executive agencies deal with certain specialized areas. The National Aeronautics andSpace Administration (NASA) is one example.

E. Government corporations are like private businesses, except that the governmentowns and runs them. Like businesses, they charge for their services, but they are not supposed to make a profit. The United States Postal Service is a government corporation.

F. Unlike other independent agencies, regulatory commissions do not report to the pres-ident. The president appoints members, but only Congress can remove them throughimpeachment. Regulatory commissions protect the public by making and enforcingrules for certain industries.

G. Top department jobs generally go to political appointees—people whom the president has chosen because they have ability or were supporters of the president’selection campaign. Their employment usually ends when the president leaves office.

H. About 90 percent of national government employees are civil service workers.Unlike appointees, they usually have permanent employment. The civil service system hires government workers on the basis of open, competitive examinationsand merit.

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I. Before 1883 government jobs went to people as a reward for their political support.Abuses of this spoils system led Congress to pass the Pendleton Act, also known asthe Civil Service Reform Act of 1883. This law limited the number of jobs the presi-dent could give to friends and backers. It also created the civil service system.

J. The Office of Personnel Management (OPM) directs the civil service system. It sets job standards and gives written tests to job seekers. The civil service system is a meritsystem. Government officials hire new workers from lists of people who have passedthe test or otherwise met civil service standards.

Discussion QuestionWhat kind of agency is the Federal Communications Commission and what does itdo? (The FCC is a regulatory commission, a kind of independent agency. It makes broadcast-ing rules for the nation’s television and radio stations.)

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I. Equal Justice for All (pages 192–193)

A. Courts settle civil disputes between private parties, a private party and the govern-ment, or the United States and a state or local government. Each side presents itsposition. The court applies the law and decides in favor of one or the other.

B. Courts also hold criminal trials for people accused of crimes. Witnesses present evidence and a jury or a judge delivers a verdict of guilt or innocence.

C. All accused people have the right to a public trial and a lawyer. If they cannot afford a lawyer, the court will appoint and pay for one. Accused people are considered inno-cent until proven guilty. They may ask for a review of their case if they think thecourt has made a mistake.

D. The goal of the legal system is equal justice under the law. This goal is difficult toachieve.

Discussion QuestionWhy is the goal of equal justice under the law difficult to achieve? (Judges andjuries are not free from personal prejudices or prejudices of their communities. Poor people do not have the money to spend on the best legal help.)

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The Federal Court System (pages 192–195)

Did You Know? The Eighteenth Amendment, which tookeffect in 1920, made it a federal crime to manufacture, sell, ortransport intoxicating beverages. Unfortunately, it also gave rise to gangsters, like the notorious Al Capone, who made a fortunefrom selling illegal liquor. Federal agents pursued Capone formany crimes, including murder. In the end, the federal crime that sent him to prison was tax evasion. In 1933, the EighteenthAmendment became the only constitutional amendment ever tobe repealed, and thus ended “prohibition.”

II. The Federal Court System (pages 193–195)

A. Article III established a national Supreme Court and gave Congress the power toestablish lower federal courts.

B. Over the years, Congress set up three levels in the federal court system—districtcourts at the bottom, appeals courts in the middle, and the Supreme Court at the top.Each state also has its own laws and court system.

C. Jurisdiction is a court’s authority to hear and decide cases. The Constitution givesfederal courts jurisdiction over eight kinds of cases.

D. If the law in question applies to the U.S. Constitution, a federal court hears the case.

E. Federal courts hear cases involving violations of federal laws.

F. Any disagreement between state governments winds up in federal court.

G. Federal courts hear lawsuits between citizens of different states.

H. If the U.S. government sues someone or someone sues the U.S. government, a federalcourt hears the case.

I. Federal courts hear disputes between a foreign government and either the U.S. government or an American private party.

J. Admiralty and maritime laws concern accidents or crimes on the high seas. Federalcourts hear cases involving these laws.

K. Federal courts hear cases involving U.S. diplomats.

L. For most of these eight areas, federal courts have exclusive jurisdiction—only theymay hear and decide such cases. Most U.S. court cases involve state law and are triedin state courts.

M. In a few circumstances, the state and federal courts have concurrent jurisdiction—they share jurisdiction and either may hear the case.

Discussion QuestionIn what eight areas do federal courts generally have exclusive jurisdiction? (Federal courts generally have exclusive jurisdiction in cases involving (1) the Constitution,(2) violations of federal laws, (3) controversies between states, (4) disputes between partiesfrom different states, (5) suits by or against the federal government, (6) foreign governmentsand treaties, (7) admiralty and maritime laws, and (8) U.S. diplomats.)

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I. U.S. District Courts (page 196)

A. District courts are the federal courts where trials are held and lawsuits are begun. All states have at least one.

B. For all federal cases, district courts have original jurisdiction, the authority to hearthe case for the first time. District courts hear both civil and criminal cases. They arethe only federal courts that involve witnesses and juries.

Discussion QuestionWhere are district courts located in the federal court system pyramid? (District courtsform the broad base at the bottom of the pyramid.)

II. U.S. Courts of Appeals (pages 197–198)

A. People who lose in a district court often appeal to the next highest level—a U.S. courtof appeals. Appeals courts review decisions made in lower district courts. This isappellate jurisdiction—the authority to hear a case appealed from a lower court.

B. Each of the 12 U.S. courts of appeals covers a particular geographic area called a circuit. A thirteenth appeals court, the Court of Appeals for the Federal Circuit, has nationwide jurisdiction.

C. Appeals courts do not hold trials. Instead, a panel of judges reviews the case recordsand listens to arguments from lawyers on both sides.

D. The judges may decide in one of three ways: uphold the original decision, reverse the decision, or remand the case—send it back to the lower court to be tried again.

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How Federal Courts Are Organized (pages 196–199)

Did You Know? The first circuit courts in the United Stateswere actually on horseback. Congress divided the original 13states into three districts. Beginning in 1790, judges called “circuit riders” traveled great distances to hear cases in their districts. Often lawyers traveled with them to help present thecases. One young lawyer from Illinois rode a circuit for manyyears. His name was Abraham Lincoln.

E. Appeals courts do not decide guilt or innocence or which side should win a suit. Theyrule only on whether the original trial was fair and protected the person’s rights. Mostappeals court decisions are final. A few cases are appealed to the Supreme Court.

F. One appellate judge writes an opinion that explains the legal thinking behind thecourt’s decision in the case. The opinion sets a precedent or model for other judgesto follow in making their own decisions on similar cases.

Discussion QuestionUnder what circumstances might someone decide to appeal? (Lawyers usually appealwhen they think the judge in their case applied the law incorrectly or used the wrong proce-dures or if new evidence turns up. Appeals courts may also review federal regulatory agencyrulings, if the people or groups involved believe the agency acted unfairly.)

III. Federal Judges (pages 198–199)

A. Each district court has at least 2 judges. Each appeals court has 6 to 27 judges. TheSupreme Court has 9 justices.

B. Presidents appoint federal judges, with Senate approval. They usually appoint judgeswho share their views. Because judges serve for life, presidents view their appoint-ments as an opportunity to affect the country after they leave office.

C. As a senatorial courtesy, presidents submit their nominations for judge to the senatorsfrom the nominee’s state. If either senator objects, the president withdraws the nameand nominates someone else.

D. Once appointed, a judge can be removed only through impeachment.

E. Each district court has magistrate judges who do much of the judge’s routine work.They hear preliminary evidence and determine whether the case should go to trial.They decide whether accused people should be held in jail or released on bail.

F. Every federal judicial district also has a U.S. attorney—a government lawyer whoprosecutes people accused of breaking federal laws. U.S. attorneys look into thecharges and present the evidence in court. They also represent the United States incivil cases involving the government.

G. Every federal judicial district also has a U.S. marshal. Marshals make arrests, collectfines, and take convicted people to prison. They protect jurors, keep order in thecourt, and serve subpoenas ordering people to appear in court.

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Discussion QuestionWhy did the writers of the Constitution decide to allow federal judges to keep their jobs for life? (The writers gave federal judges this sort of job security because theywanted judges to be able to decide cases free from public or political pressures. Federal judgesknow that their jobs are safe even if they make unpopular decisions.)

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I. The Supreme Court Justices (pages 200–201)

A. The main job of the nation’s top court is to decide whether laws are allowable underthe Constitution.

B. The Supreme Court has original jurisdiction only in cases involving foreign diplomatsor a state. All other cases come to the Court on appeal.

C. The Court chooses the cases it hears. In cases the Court refuses to hear, the decisionof the lower court stands. The Court has final authority on cases involving theConstitution, acts of Congress, and treaties.

D. Eight associate justices and one chief justice make up the Supreme Court. After decid-ing a case, the justices issue a written explanation, called the Court’s opinion.

E. The president appoints Supreme Court justices, with Senate approval. The president’sdecision may be influenced by the Justice Department, American Bar Association,interest groups, and other Supreme Court justices.

F. Supreme Court justices are always lawyers. A successful law career, political support,and agreement with the president’s ideas are factors in whom gets appointed.

Discussion QuestionWhy might the Senate reject a president’s nominee for Supreme Court justice?(Throughout history, the Senate has rejected many presidential nominees to the SupremeCourt because of doubts about the qualifications or the legal philosophy of the persons nominated.)

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The United States Supreme Court (pages 200–204)

Did You Know? President Franklin D. Roosevelt pushed anumber of strong laws through Congress to try to deal with theGreat Depression. However, the Supreme Court ruled a key law inRoosevelt’s program unconstitutional. Then Roosevelt watched infrustration as the Court struck down one program after another.To try to save his programs, Roosevelt proposed a new law thatwould increase the number of justices from 9 to 15. As presi-dent, he could then fill the open positions. Critics chargedRoosevelt with trying to “pack” the Court with appointees whowould favor his policies. Congress did not pass the proposal.

II. Powers of the Court (pages 202–203)

A. The legislative and executive branches must follow Supreme Court rulings. Becausethe Court is removed from politics and the influences of special-interest groups, theparties involved in a case are likely to get a fair hearing.

B. The Court’s main job is to decide whether laws and government actions are constitu-tional, or allowed by the Constitution. It does this through judicial review—thepower to say whether any law or government action goes against the Constitution.

C. The Constitution does not give the Supreme Court the power of judicial review. TheCourt claimed the power when it decided the case Marbury v. Madison.

D. As President John Adams was leaving office, he signed an order making WilliamMarbury a justice of the peace. The incoming president, Thomas Jefferson, refused to carry out the order. Marbury took his case to the Supreme Court.

E. In the Court’s opinion, Chief Justice John Marshall set forth three principles of judi-cial review: (1) The Constitution is the supreme law of the land. (2) If a law conflictswith the Constitution, the Constitution rules. (3) The judicial branch has a duty touphold the Constitution. Thus, it must be able to determine when a law conflicts with the Constitution and nullify that law.

F. The power of judicial review serves as a check on the actions of the executive andlegislative branches.

G. Congress writes laws in general language. Through its rulings, the Supreme Courtinterprets the meaning of laws, helping the police and other courts apply them.

Discussion QuestionWhy is the power of judicial review an important part of the system of checks andbalances? (By declaring acts of Congress or executive orders unconstitutional, the SupremeCourt can check the actions of the legislative and executive branches of government to keepthem from straying too far from the Constitution when they make and carry out laws.)

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III. Limits on the Courts’ Power (pages 203–204)

A. The Court depends on the executive branch and state and local officials to enforce itsdecisions. Usually they do.

B. Congress can get around a Court ruling by passing a new law, changing a law ruledunconstitutional, or amending the Constitution.

C. The president’s power to appoint justices and Congress’s power to approve appoint-ments and to impeach and remove justices serve to check the power of the Court.

D. The Court cannot decide that a law is unconstitutional unless the law has been chal-lenged in a lower court and the case comes to it on appeal. The Court accepts onlycases that involve a federal question. It usually stays out of political questions.

Discussion QuestionWhat did the case Worcester v. Georgia illustrate about the power of the SupremeCourt? (This case illustrated that the Court must depend on the executive branch to carry out its decisions. In this case, President Jackson refused to enforce the Court’s decision.Because most citizens agreed with him, no public pressure forced him to uphold the decision.)

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I. How Cases Reach the Court (pages 206–207)

A. The Supreme Court conducts business each year from October until June or July.Each month, the justices spend two weeks listening to oral arguments on cases andtwo weeks writing opinions and studying new cases.

B. The Court receives most of its cases on appeal from a lower court, but sometimes alower court asks for a ruling because it is not sure how to apply the law in a case.

C. Of the more than 7,000 applications each year, the Court agrees to hear fewer than200. The Court accepts cases that four of the nine justices agree the Court shouldreview. They usually select cases that involve important constitutional issues and casesthat affect the entire nation.

D. Accepted cases go on the Court docket, or calendar.

Discussion QuestionWhat kinds of cases do the Supreme Court justices tend to accept? (Usually the jus-tices take cases that involve important constitutional issues, such as freedom of speech, equalprotection of the laws, or civil liberties. They also tend to select cases that involve legal, ratherthan political, issues, as well as those that affect the entire country rather than just the indi-viduals or groups directly involved.)

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Deciding Cases at the Supreme Court (pages 206–210)

Did You Know? Oliver Wendell Holmes, Jr., served on theSupreme Court for almost 30 years. In his early years on theCourt, he clashed with the other justices so often that he becameknown as the “Great Dissenter.” Later, as new, less conservativejustices joined the Court, his ideas gained support. He felt stronglythat justices should not allow their personal beliefs to influencetheir decisions. This idea, known as “judicial restraint,” is nowwidely accepted among judges.

II. Steps in Decision Making (pages 207–208)

A. Each accepted case goes through five steps: written arguments, oral arguments, conference, opinion writing, and announcement.

B. The lawyers first prepare a written brief that explains their side of the case. The justices study the briefs.

C. Next, each side gets 30 minutes to present its case orally. Then the justices ask toughquestions.

D. On Fridays, the justices meet privately to discuss the case. A majority vote decides the case.

E. After the Court reaches a decision, one justice writes a majority opinion. It presentsthe views of the majority of justices. The opinion states the facts, announces the ruling, and explains the Court’s reasoning in reaching the decision.

F. The Court may also write a unanimous opinion when all the justices vote the sameway. One or more justices who disagree with the majority may write dissentingopinions. A justice who votes with the majority, but for different reasons, may writea concurring opinion.

G. Finally, the Court announces its decision. Printed copies of the opinion go to newsreporters. A copy is posted on the Court’s Web site.

Discussion QuestionWhy are written opinions important? (Written opinions set a precedent for lower courtsto follow in future cases, and they communicate the Court’s view to Congress, the president,interest groups, and the public. Also, there is still time for justices to change their minds. Anopinion may influence a justice to change his or her vote.)

III. Reasons for Court Decisions (pages 208–210)

A. The law is supposed to be the most important influence on a justice’s decision.

B. Justices consider how the language of the Constitution applies to the case. They relyheavily on precedents, following the principle of stare decisis—“let the decisionstand.” By following precedents, courts make the law predictable and consistent.

C. At the same time, the law must be flexible to adapt to changing times. The justicescan overrule outdated precedents.

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D. Social conditions also influence Court decisions. When social conditions change, theCourt may make new interpretations of the law.

E. For example, in Plessy v. Ferguson, the Court ruled that the Fourteenth Amendmentpermitted racial segregation. However, by the 1950s, society’s views on segregationwere beginning to change. In 1954, in Brown v. Board of Education, the Court ruledthat school segregation violated the Fourteenth Amendment, overturning the precedent of “separate but equal.”

F. Justices’ views of the law and the role of the courts also influence their decisions.

G. Like all human beings, justices see the world based on their own life experiences.Their personal views and relationships influence their decisions.

Discussion QuestionIn both Plessy v. Ferguson and Brown v. Board of Education, the Supreme Courtapplied the Fourteenth Amendment to questions of racial segregation. Why did the Court make different decisions in the two cases? (The social conditions of the timeinfluenced their decisions. In the earlier Plessy case, segregation was common, and the Courtupheld it. By the time of the later Brown case, society’s views on segregation were beginningto change. The Court’s decision in the case to strike down segregation reflected the changingsocial climate.)

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I. The Two-Party System (pages 218–219)

A. A political party is an association of voters with broad common interests who wantto influence or control decision making in government by electing the party’s candi-dates to public office. Parties pick candidates who agree with their beliefs and try topersuade voters to support those candidates.

B. Anyone may join a political party. You simply declare yourself a member.

C. The United States has had two major parties, or a two-party system, since 1860.

D. Thomas Jefferson and Alexander Hamilton disagreed strongly about how the govern-ment should operate. Hamilton wanted a strong national government and strongpresident. Jefferson wanted less power for the national government and more forstate governments. Two rival political groups formed around these two leaders.

E. Jefferson’s group was called the Democratic-Republican Party. In 1828, the party split,and the new leader Andrew Jackson aligned with the Democratic Party. Jefferson’sparty grew stronger. Hamilton’s group, the Federalist Party, faded away.

F. The Whigs (or National Republicans) rose in 1830, and the Whigs and Democratsremained the two major parties until the 1850s.

G. In 1854 breakaway Democrats and Whigs who opposed slavery formed theRepublican Party. The Whigs lost support. Abraham Lincoln became the firstRepublican president in 1860. Since then, Republicans and Democrats have been our two major parties.

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Development of American Political Parties(pages 218–222)

Did You Know? Theodore “Teddy” Roosevelt led what hecalled “the strenuous life.” He hiked, hunted, and boxed. As pres-ident, he attacked issues with great energy. After leaving office in1909, he traveled to Africa to hunt big game. Upon his return, heand his followers formed the Progressive Party to challenge thereelection of William Howard Taft. When a reporter asked how hefelt, he replied: “I feel as strong as a bull moose.” The namestuck, and his party became known as the “Bull Moose Party.”

Discussion QuestionDiscuss the views of Hamilton and Jefferson about the power of the national gov-ernment. (Hamilton believed that individual rights were at risk if the government was tooweak, so he favored a strong national government. Jefferson argued for less power for thenational government and more for state governments, which were closer to the citizens.)

II. Third Parties (pages 219–221)

A. Third parties sometimes challenge the two major parties. A third party has neverwon a presidential election and rarely wins other major elections. Third parties caninfluence the outcome of elections and may influence policy.

B. Farmers and laborers formed the Populists in the 1890s. They called for the directelection of senators and an eight-hour working day. They did not win, but the twomajor parties adopted many of their ideas.

C. In 1912, former Republican president Theodore Roosevelt ran for president for theProgressives, or Bull Moose Party. He won enough votes away from the Republicancandidate, William Howard Taft, that Democrat Woodrow Wilson won the election.

D. Some third parties arise to promote a social, economic, or moral issue. TheProhibitionist Party pushed for laws against the sale of alcohol. Single-issue partiesfade when the issue loses importance or a major party adopts it.

E. Ideological parties focus on changing society in major ways. The Socialist Labor Partyand Communist Party favor government ownership. The Libertarian Party wantsmore individual freedom. The Green Party opposes the power of corporations.

F. Some third parties form around well-known individuals who cannot get support froma major party. Such parties fade after their candidate’s defeat.

G. Republican and Democratic candidates are automatically placed on the ballot in manystates. Third-party candidates must obtain a large number of signatures to get on theballot.

H. Usually only one candidate can win a district. Most voters favor a major party.

I. Third parties have trouble raising enough money to compete with the major parties.

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Discussion QuestionHow can third parties influence government and social policy? (Third parties, such asthe Populists and Prohibitionist Party, use election campaigns to try to influence citizens toaccept their views on social issues or the operation of government. If they are persuasive, amajor party may adopt their views, and public opinion may influence Congress to pass thelaws they favor.)

III. Other Party Systems (pages 221–222)

A. Political parties exist in most countries, but two-party systems are rare.

B. Most democracies have multiparty systems. One party rarely wins enough support tocontrol the government, so several parties must work together. Competing interestscan create a politically unstable situation.

C. In a one-party system, the government and party are nearly the same thing. In thePeople’s Republic of China, only the Communist Party is allowed to exist. A one-partysystem is not a democracy. There are no rival candidates in the elections.

D. One-party systems also exist in some non-Communist nations. Muslim leaders controlIran’s Islamic Republican Party. Other parties are outlawed or inactive.

Discussion QuestionWhy is the People’s Republic of China not considered a democracy? (Only oneparty—the Communist Party—is allowed to exist there. Only Communist candidates mayrun for office. Elections are an empty exercise since there are no rival candidates.)

IV. Today’s Major Parties (page 222)

A. Competing political parties give voters a choice among candidates and ideas.

B. The major parties differ mainly in their belief about how much the governmentshould be involved in the lives of Americans.

C. Democrats tend to believe that the federal government should be more directlyinvolved in regulating the economy and providing for the poor. Republicans tend tobelieve that if they help the economy grow, poor people will have a better chance offinding jobs and providing for themselves. They believe in less regulation.

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D. Both parties try to appeal to as many voters as possible. As a result, they tend toadopt mainstream, moderate positions and avoid extremes. The parties are also similar because the American people generally agree about many issues.

E. A platform is a series of statements expressing the party’s principles, beliefs, andpositions on issues. Each individual part is called a plank. The platform communi-cates to voters what the party plans to do if it wins.

Discussion QuestionWhy are competing political parties a necessary part of democratic government?(They are a key link between citizens and their elected officials. They give voters a choiceamong candidates and ideas. They help make elections meaningful.)

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I. National Party Organization (pages 223–224)

A. The goal that unites a party’s national, state, and local organizations is to help theparty win as many offices as possible.

B. Each party has a national committee made up of representatives from every state.It raises funds for presidential elections and organizes the party’s national convention.A national party chairperson runs the committee.

C. At the national convention, party delegates from all states write the platform andnominate candidates for president and vice president. Each party chooses delegates inprimary elections and caucuses, or meetings, of state and local party organizations.

D. Historically, national conventions were suspenseful. Today, primary elections generallydecide the nominations before the conventions take place.

E. Both parties also have House and Senate campaign committees made up of membersof Congress. They work to elect party members as senators and representatives.

Discussion QuestionWhat have national committees been doing in recent years? (In recent years, the com-mittees have created Web sites with information about candidates and positions. They recruitcandidates, teach them effective campaign strategies, and give them some campaign funds.They also create television and radio advertisements.)

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Organization of American Political Parties(pages 223–226)

Did You Know? In the period immediately following theCivil War, many Republicans from the North traveled to the South to build the party’s organization there. They gained controlof many state governments. They granted rights to the newlyfreed slaves, including the right to vote. Many Southern whitesresented the Northern intruders. They scornfully called them “carpetbaggers” for the suitcases made of carpet material com-mon at the time.

II. State and Local Organization (pages 224–226)

A. Each party has 50 state organizations that work to elect their party’s candidates fornational office.

B. Local party organizations consist of city, town, and county committees. They includethe party’s elected officials.

C. Each city or county is divided into election districts or precincts. A precinct is a geo-graphic area that contains a specific number of voters. It may be an entire small townor part of a large city. All voters in a precinct use the same voting place.

D. A precinct captain organizes other party volunteers and encourages people to vote.

E. Several adjoining precincts make up a ward. A volunteer represents the ward at theparty’s county committee.

F. Counties are the largest political units in a state. A county chairperson runs thecounty committee and has great power if the county is large.

G. Local party people build support at the “grassroots” level. Local leaders must knowhow their neighbors feel about issues important to them. At election time they must“deliver the vote” for party candidates at every level.

H. In the past, some local party organizations became so powerful that they were calledpolitical machines. In the 1800s and early 1900s, the Tammany Hall organizationruled New York City. Its leader, “Boss” Tweed, grew rich from bribes and kickbacks.

I. At a time when no social service agencies existed, political machines provided needycitizens with jobs, food, and other services in return for votes.

J. Membership in a political party is not required, but it offers a way for citizens to beinvolved in politics. The only duty is to vote. Members can choose to contributemoney, do volunteer work, or help with election campaigns.

Discussion QuestionWhy do most people today consider political machines harmful? (When one party isin power too long, it may become unresponsive to the needs of the community. Political lead-ers are less accountable to citizens when the leaders do not have to worry about gettingreelected.)

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I. Nominating Candidates (pages 227–229)

A. Political parties are active year-round. They keep people informed and interested inissues and candidates. They try to see that the party’s elected officials do a good job.They politically criticize actions of the opposing party.

B. Parties select candidates through the nomination process. In direct primaries,voters in each state choose candidates to represent the party in a general election.Often the winner of the most primaries wins the party’s nomination.

C. Most states hold closed primaries in which only declared members may vote for the party’s nominees. A few states hold an open primary in which voters need notdeclare a party preference to vote for the party’s nominees.

D. For offices open to only one winner, the nomination usually goes to the candidatewho receives a plurality—the most votes among all those running. In a few states,the winner must have a majority—a number greater than half of the total. If no can-didate receives a majority, the party holds a runoff primary between the two topvote getters.

E. An independent candidate may get on the ballot if enough voters sign a petition—a paper declaring support for the candidate.

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Role of Political Parties Today (pages 227–230)

Did You Know? Declaring yourself a Republican orDemocrat does not mean that you must vote for all the candidates of that party. In fact, Americans often vote a “splitticket”—selecting candidates from both parties on the same ballot. Republican Ronald Reagan owed much of his election success in 1980 and 1984 to the votes of people who consid-ered themselves Democrats.

Discussion QuestionWhat are some arguments for and against the use of a closed primary? (People whofavor the closed primary claim that it helps keep the members of one party from crossing overinto the other party’s primary to try to promote weak candidates who will be easy to defeat.An argument against the closed primary is that it does not permit a truly secret ballot, sincevoters must first declare a party preference. It also prevents independent voters from takingpart in primaries.)

II. Other Party Roles (pages 229–230)

A. Parties raise money for the campaign and help get the candidates’ views across to thepublic. They make sure supporters are registered to vote and actually vote.

B. Through campaign pamphlets, speeches, and advertising, parties inform citizens aboutissues and the way government works.

C. After an election, party leaders recommend party supporters for government jobs tobe filled by appointment rather than through the civil service process.

D. Party ties aid cooperation among levels and branches of government. Shared viewsand relationships within a party make it easier for members to work together.

E. Parties play a “watchdog” role. The party out of power watches the actions of those inpower for mistakes and misuse of power. Competition between parties forces theparty in power to pay attention to the will of the people.

Discussion QuestionHow are government jobs filled after an election? (Most government jobs are civil serv-ice jobs gained on the basis of open, competitive examinations and merit. However, some jobsare filled by appointment. Elected officials appoint their trusted supporters to high-level jobs.They often seek recommendations from party leaders to fill other jobs.)

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I. Qualifying to Vote (pages 236–237)

A. Voting is the right to choose who will run the government. It is also a civic responsi-bility. If you don’t vote, you hand over your share of political power to other voterswho may not share your views.

B. In the nation’s early years, most voters were white, adult male property owners.Today the Constitution forbids any state to deny the right to vote because of race,color, gender, or age (if the person is at least 18 years old). An exception is a personin prison.

C. To be eligible to vote, you must be at least 18, a resident of the state for a specifiedtime, and a U.S. citizen. In most states, you must also be registered to vote.

D. You must register by the deadline set by your state. You can register in person at acounty office. In some states, you may register by mail. The National VoterRegistration Act allows voters to register when they renew their drivers’ licenses.

E. Registration forms ask your name, address, age, and often your party preference. Ifyou register as a Republican or Democrat, you may participate in primary elections.

F. You must prove citizenship, address, and age by showing your driver’s license or birthcertificate. You will be assigned to a district. When you go to vote, election officialswill check for your name on a list of voters registered in the district.

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Who Can Vote? (pages 236–240)

Did You Know? As the 1948 election neared, the situationlooked bleak for Democratic President Harry Truman. TheDemocratic Party was deeply divided. Public opinion polls predicted a landslide victory for Republican candidate ThomasDewey. The morning after the election, Truman awoke to aChicago Tribune headline shouting “Dewey Defeats Truman.” Theprediction, though, proved hasty. After the votes were counted,Truman had won. In trying to determine why their predictionswere wrong, poll takers realized that they had conducted the pollstoo early. Voters had time to change their minds. Today, exit pollsand other methods make predictions more reliable.

Discussion QuestionWhen you go to the polls, why do election officials look for your name on a list?(Your name on the list verifies that you are registered and eligible to vote. It also prevents youfrom voting more than once.)

II. Steps in Voting (pages 237–239)

A. To vote, you go to the polling place, a location in your precinct, or voting district.You fill out and sign an application form at the clerk’s table. The clerk reads yourname aloud and passes your application to a challenger’s table.

B. The challenger looks up your registration form and compares your signature to theone on your application. If they do not appear to match, the challenger may ask formore identification. When convinced, the challenger initials your application.

C. You go to the voting booth and hand the application to an election judge, who makessure everyone can vote in secret and helps people with special needs.

D. A ballot is the paper you use to cast your vote. It lists the candidates’ names accord-ing to their party and the office they are seeking.

E. You cast your ballot by using a voting machine. The type of machine varies from stateto state. With one type you punch a hole next to a candidate’s name. With anothertype you use a lever.

F. If you vote for all candidates in one political party, you are voting a straight ticket. If you choose candidates from both parties, you are voting a split ticket. You maychoose to cast a write-in vote by writing the name of someone not on the ballot.

G. People away from home or too sick to get to the polls on Election Day can vote byabsentee ballot. They mark the ballot and return it by mail.

H. When polls close, election workers count the votes and take the ballots and returns,or results, to the election board. The election board compiles the count for the city or county. A few days later, the state canvassing authority certifies the winner.

I. News media and party workers conduct exit polls—asking voters leaving the pollshow they voted. Specialists use the results to predict winners early. Television net-works may announce winners before voters in Western time zones have voted. Critics charge that early calls may persuade many Westerners not to vote.

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Discussion QuestionHow can early predictions of winners affect the voting in Western states? (Televisionnetworks often make early calls when millions of Americans in the Western time zones haveyet to vote and the polls are still open. Such early projections may persuade great numbers ofWesterners not to vote. This not only reduces overall voter turnout but also may affect theresults of local, state, and congressional elections.)

III. Why Your Vote Matters (pages 239–240)

A. Sources of information about candidates and issues include newspapers, TV, radio,newsmagazines, and the Internet. Others include literature distributed by politicalparties, the League of Women Voters, and interest groups.

B. All people who are eligible to vote are called the electorate. Each vote counts.

C. Some people don’t vote because they think no candidates represent their interests or think their vote will not matter. Another reason is apathy, or lack of interest.

D. Citizens who vote share common characteristics. They generally have positive atti-tudes toward government and citizenship. Regular voters tend to be more educated,be middle-aged, and have higher incomes.

E. Voting gives citizens a chance to choose their government leaders. If they are dissatis-fied with past performances, they can elect new leaders. By voting they can alsoexpress their opinions on public issues.

Discussion QuestionWhy should you read information about candidates and issues carefully?(Information in print and other media help you stay informed so that you can vote wisely.However, you must read carefully to separate facts from opinions. Much of the literaturecomes from political parties and other groups that have an interest in persuading you to votea certain way.)

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I. Types of Elections (pages 241–242)

A. Besides primary elections, there are three types of elections in the United States: general elections, elections on issues, and special elections.

B. After primary races narrow the field, voters choose candidates in a general electionthat occurs on the first Tuesday after the first Monday in November.

C. All seats in the House and about one-third of the seats in the Senate are at stake ingeneral elections every even-numbered year. Presidents are elected every four years.

D. In all except presidential races, the candidate with the majority of the popular votewins. If the count is very close, the loser may demand a recount. If neither candidatefor president wins a majority of electoral votes, the House elects the president.

E. Citizens can propose new laws or state constitutional amendments through an initiative. If enough voters sign a petition, the proposed law, or proposition, is put on the ballot at the next general election.

F. Citizens may petition to have a state or local law referred, or sent back, to the votersas a referendum on the ballot. The voters can then approve or reject the law.

G. A runoff is a special election held to determine a winner when none of the candidateswins a majority in the general election. A recall is a special election in which citizenscan vote to remove an official from office.

Discussion QuestionWhy might voters recall an official? (Voters might recall an official because they do notlike his or her position on issues or because the official has been charged with wrongdoing.)

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Election Campaigns (pages 241–244)

Did You Know? New technology has greatly changed theway candidates campaign for office. In the past, candidateswould make as many personal appearances as possible. In a“whistle-stop” tour, candidates would travel thousands of milesby train, stopping often to make speeches from the train’s rearplatform. Today, candidates reach more voters in one televisionappearance than they do in all their in-person appearances.

II. Presidential Elections (pages 242–244)

A. The three steps in a presidential election are nomination, the campaign, and the vote.

B. Presidential hopefuls start campaigning for their party’s nomination a year before theelection.

C. Past national conventions were full of political dealing to win delegates’ support for acandidate. In recent years the conventions have lost their main purpose—choosing anominee. The primaries do that now. Instead, the conventions serve to rally partymembers for the campaign ahead.

D. By early September, candidates are already giving speeches, appearing on TV, andholding news conferences. They may face their opponents in televised debates.

E. Presidents are chosen by the Electoral College, not by direct popular vote. Eachstate has a slate of electors pledged to each candidate. The popular vote chooses the slate of electors. In the winner-take-all system, the candidate who wins thepopular vote takes all the state’s electoral votes.

F. The winning electors cast their votes in their state’s capital in December. Congresscounts the votes. Each state has one elector for each of its U.S. senators and represen-tatives. To win, a candidate must win 270 of the 538 total electoral votes.

G. The Electoral College system was a compromise. Some Founders wanted direct popu-lar election of the president. Others wanted Congress to name the president. Theircompromise was to have the state legislatures choose electors. Now the voters in eachstate directly choose the electors.

H. Some critics charge that large states with many electors have too much influence indeciding elections. Others claim that including votes for senators gives small statesunfair power. Still others point out that under the winner-take-all system, a candidatewho loses the popular vote can still win the electoral vote and the presidency.

I. A third-party candidate could win enough electoral votes to prevent either major-party candidate from receiving a majority and then bargain to release electoral votes.Also, the winner-take-all system makes it hard for third-party candidates to take anyelectoral votes.

Discussion QuestionWhy did the Founders create the Electoral College system? (Some Founders wantedthe people to have direct control over the national government. They wanted direct election.Others believed that the government must be able to function without having to give in topopular whims. They wanted Congress to choose the president. They compromised by havingstate legislatures choose electors.)

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Paying for Election Campaigns (pages 246–250)

Did You Know? Campaign finance laws allow candidates tospend as much of their own money on their campaigns as theywant. In the 1992 presidential campaign, billionaire businessmanRoss Perot showed that big money makes a big difference. Perotran as a third-party candidate. In the last month of the campaign,he spent $37 million of his own money on TV advertising. In all,he spent more than $60 million of his own money. When thevotes were counted, he had received 19 percent of the nationalvote—more than any third-party candidate since TheodoreRoosevelt and the Bull Moose Party.

I. Running for Office (pages 246–247)

A. A campaign for a major office takes a lot of money.

B. A campaign organization runs each campaign. Campaign workers acquaint voterswith the candidate’s name, face, and positions on issues. They try to convince votersto like and trust the candidate.

C. Candidates and campaign workers canvass neighborhoods asking for votes, handingout literature, and conducting public opinion polls.

D. Famous people, such as movie stars, may endorse or publicly support a candidate. Ifvoters like the endorser, they may decide to vote for the candidate. Endorsements area kind of propaganda, or attempt to promote a particular person or idea.

E. Much campaign money is spend on political advertising. Ads help create the candi-dates’ image, present their views, and attack their opponents. Local candidates oftenuse newspaper ads, while national candidates use more TV ads.

F. Campaign funds pay for TV ads, airfares, worker salaries, and professional campaignconsultants. They also pay for computers, phones, postage, and printing costs. Localraces may cost only a few thousand dollars. Congressional races average about $1.5million. A presidential race can cost hundreds of millions of dollars.

Discussion QuestionWhy do national candidates advertise on television? (Television ads can present quickand dramatic images of a candidate and his or her ideas. Such television images tend to stayin the viewer’s mind.)

II. Financing a Campaign (pages 248–250)

A. In the past, the public wondered if successful candidates would owe special favors tothe individuals, businesses, and labor unions that contributed to their campaigns. TheFederal Election Campaign Finance Act of 1971 set some rules.

B. The Campaign Finance Act required public disclosure of each candidate’s spendingand tried to limit the amount an individual or group could donate. It also createdpublic funding of presidential elections. Taxpayers can contribute $3 to thePresidential Election Campaign Fund by checking a box on their tax form.

C. Candidates qualify for a share of these funds if they raise $100,000 on their own. Thetwo major-party candidates receive an equal share as long as they agree not to acceptany other direct donations. Third-party candidates qualify if their party received morethan 5 percent of the popular vote in the previous presidential election.

D. Most campaign funding comes from private sources—individuals, party organizations,and corporations, plus a wide variety of interest groups.

E. After presidential candidates receive their federal funds and the modest amounts thatindividuals and groups give them directly, their fund-raising is supposed to be fin-ished. However, candidates have found ways around the limits.

F. One way is soft money—donations given to political parties and not designated for aparticular candidate. By law, parties can raise an unlimited amount of soft money, butthey must use it for general expenses.

G. The parties, however, have found ways to use soft money to support their candidateswithout giving it to them directly. Most of it goes to national TV ads. Soft money pro-vides a way for wealthy people and groups to donate as much as they want.

H. Another way around the limits is political action committees (PACs). These arepolitical organizations established by corporations, labor unions, and other special-interest groups designed to support candidates by contributing money. PACs supportcandidates who favor their position on issues by contributing to their parties.

I. In a democracy, government should represent all the people, even those withoutmoney or power. Critics of the current system argue that wealthy donors may receivespecial favors not available to average citizens.

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J. In 1976, the Supreme Court ruled that it was a violation of free speech to limit howmuch candidates could spend on their own campaigns. As a result, wealthy candi-dates spend huge amounts of their own money to get elected.

K. Congress continues to debate plans to reform campaign finance. Because PACs give most of their soft money to incumbents—people currently in office—many lawmakers hesitate to change the rules in ways that could help their opponents.

Discussion QuestionWhy do many people believe that we should reform our current system of fundingcampaigns? (Under the current system, wealthy individuals and groups can donate unlimitedamounts of soft money to the parties of their favored candidates. Critics argue that thesewealthy donors may later receive special favors not available to average citizens. Also,wealthy individuals may be able to “buy” an election by spending huge amounts of theirown money on their campaigns.)

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I. Forming Public Opinion (pages 258–260)

A. Public opinion includes the ideas and attitudes that most people hold about electedofficials, candidates, government, and political issues. It helps shape the decisions ofevery president as well as the timing of the decisions.

B. Public opinion is not uniform. Many shades of opinions exist on most issues. Enoughpeople must hold a particular opinion to make government officials listen to them.

C. People’s backgrounds and life experiences influence their opinions.

D. Television, radio, newspapers, magazines, recordings, movies, and books are called the mass media because they communicate broadly to masses of people. Issues andevents the mass media cover and the way they cover them affect people’s attitudes.

E. Political leaders and public officials influence public opinion. They state their views in the mass media, hoping to persuade people to support their positions.

F. People who share a point of view about an issue may form an interest group. The group works to persuade people and officials toward their point of view.

Discussion QuestionWhy does public opinion help shape the decisions of every president? (Presidentsknow they need the support of the public to carry out their programs. They also need the sup-port of Congress. They are more likely to have this support if their public popularity is high.)

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Public Opinion (pages 258–262)

Did You Know? In 1936, a magazine mailed out millions ofquestionnaires to try to find out who would be elected president.From the responses, the magazine concluded that Al Landonwould defeat Franklin Roosevelt. In the election, Roosevelt won ina landslide. Why was the poll so wrong? The magazine had sentthe questionnaires to people listed in phone books and in lists ofcar owners. At this time, not everyone owned a car or a phone.As a result, the sample included mostly wealthy people. The pollresults, then, did not accurately reflect the choices of mostAmericans.

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II. Components of Public Opinion (pages 260–261)

A. Experts often describe public opinion in terms of direction, intensity, and stability.

B. Direction refers to whether opinions on a topic are positive or negative, for or against.

C. Intensity refers to the strength of opinion on an issue.

D. Stability means how firmly people hold their views. Public opinion on candidates isrelatively unstable.

Discussion QuestionWhat kinds of opinions are people less likely to change? (People’s opinions are lesslikely to change when they have a firm belief about a topic.)

III. Measuring Public Opinion (pages 261–262)

A. Election results give a broad measure of public opinion. A more accurate measurecomes from asking people to answer questions in a survey, or public opinion poll.

B. Elected officials use polls to monitor public opinion. Most presidents have a pollster—a specialist whose job is to conduct polls regularly.

C. Polling organizations question people selected at random from all over the UnitedStates. To present a fairly accurate picture of public opinion, a sample must reflect thecharacteristics of the entire population. The questions must be fair and unbiased.

D. Some people believe polls support democracy by allowing officials to keep in touchwith citizens’ opinions on issues. Critics claim polling makes officials more concernedwith following the public than in leading.

E. Many people worry that polls distort elections. During campaigns, the media con-stantly report who is ahead at the moment, taking the focus off the issues. Also, some people may decide not to vote if they think the outcome has been determined.

F. The Framers succeeded in creating a representative democracy that responds to thewishes of the people yet is shaped by other influences as well.

Discussion QuestionTo get a fairly accurate picture of public opinion, who should pollsters include intheir polls? (A well-constructed sample will reflect the characteristics of the entire popula-tion. It will usually include men and women of nearly all races, incomes, ages, andviewpoints.)

I. Types of Media (pages 264–265)

A. The mass media influence politics and government. They also form a link between thepeople and elected officials.

B. Newspapers, magazines, newsletters, and books are print media. Radio, television,and the Internet are electronic media.

C. The media are businesses that operate for a profit. They run the news they think willattract the largest audience.

D. Television is the most important medium for politics because it reaches the most people. However, print media provide deeper coverage.

E. Internet users can get information whenever they wish. They can also get more information than brief radio or television reports provide.

Discussion QuestionWhy do media outlets run the news they think will attract the largest audience?(The media are private businesses run to make a profit. The larger the audience they canattract, the more money they can charge for advertising.)

II. The Media’s Impact on Politics and Government (pages 265–267)

A. The problems that receive the most time, money, and effort from government leadersmake up the public agenda. The media have great influence on which problemsgovernments consider important. They publicize some while others go unnoticed.

B. The modern media enable people with little political experience to run for office.

C. Elected officials and the press need one another, yet they often clash.

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The Mass Media (pages 264–268)

Did You Know? Just about every major news source,including television stations, large newspapers, and magazines,also operate a Web site. Along with written news stories, thesesites may offer video or audio clips from television or radio newsbroadcasts. Visitors can often interact with the journalists bysending an e-mail or participating in a poll conducted at the site.

D. Elected officials want the media to show them as hardworking, effective leaders. Withthe help of press secretaries, they hold news conferences, give interviews, and stagemedia events.

E. Officials may secretly pass on, or leak, information to friendly reporters. Leaks allowthem to test public reaction before deciding whether to publicly move ahead with aproposal or to quietly drop it. They also use leaks to make competing officials lookbad, to change public opinion on an issue, or to gain favor with a reporter.

F. Leaks benefit reporters by allowing them to report “inside” information.

G. The mass media play a “watchdog” role. By exposing government misconduct, theyserve both their interests and the public interest.

H. Recently journalists have begun looking for scandal in officials’ private as well as public lives. Critics say this practice will drive good people out of politics.

I. There is tension between the American citizens’ need for information and the needfor government to keep secrets to protect national security. The government can con-trol information the media report by classifying it as secret and limiting coverage ofmilitary actions.

Discussion QuestionHow do leaks benefit reporters? (Reporters benefit from being able to report “inside”information. When they can be the first to break a hot story, they “scoop” their rivals andbecome more successful as journalists.)

III. Protecting the Media (page 268)

A. Democracy requires a free flow of information and ideas.

B. The First Amendment protects freedom of the press, which today includes all media.

C. The Supreme Court has ruled that freedom of the press includes freedom from priorrestraint, or government censorship of material before it is published. Journalists canreport what they want, even if it is unpopular or embarrassing to officials.

D. Freedom of the press does not allow reporters to publish false information that willharm someone’s reputation. This is libel. The Supreme Court ruled that to win a libelsuit, public officials must prove malice—that the publisher knew the material wasfalse or showed reckless disregard for the truth.

E. The government has the power to decide who gets access to the limited number ofairwaves available for radio and television broadcasting. The Federal CommunicationsCommission cannot censor broadcasts, but it can penalize stations that violate itsrules.

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Discussion QuestionWhy is freedom of the press important? (Democracy requires a free flow of informationand ideas. Freedom of the press allows journalists to report whatever true information theywant, even if it is unpopular or embarrassing to the government or to individual politicians.)

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I. Types of Interest Groups (pages 270–271)

A. Interest groups form to promote a shared viewpoint. By pooling their resources,members can increase their chances of influencing decision makers.

B. The First Amendment protects the right to belong to interest groups by guaranteeingthe right to assemble peacefully and to petition the government.

C. Groups based on economic interests are some of the most powerful. The Chamber ofCommerce, one of the largest, promotes free enterprise. Others, such as the TobaccoInstitute, represent specific types of businesses.

D. Labor unions work for the economic interests of workers. The largest, the AFL-CIO, isan alliance of labor unions. Professionals, such as doctors and lawyers, have their owninterest groups.

E. People have also organized to promote an ethnic group (the NAACP, for example),age group (AARP), or gender (NOW). Interest groups also work for special causes,such as protecting nature (the Sierra Club).

F. Public interest groups support causes that affect the lives of Americans in general,rather than just the special interests of their own members. For example, CommonCause promotes laws to control pollution and protect consumers.

Discussion QuestionAre interest groups biased? Explain. (By their very nature, interest groups are biased;that is, they support a particular viewpoint. To be biased is the opposite of being impartial—considering all viewpoints equally.)

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Interest Groups (pages 270–275)

Did You Know? The League of Women Voters grew out ofthe woman suffrage movement, but it isn’t just for women—mencan join, too. The group does not endorse candidates or politicalparties. It strives to educate voters and to encourage all citizensto participate in the political process. The League does take astand on some issues. For example, in 2002, the League pushedfor campaign finance reform, among other issues.

II. Influencing Government (pages 272–273)

A. Public policy is the course of action the government takes in response to an issue or problem. The primary goal of interest groups is to influence public policy.

B. Interest groups back candidates who agree with their beliefs. Many form politicalaction committees (PACs) that use money from members to support candidates.

C. Interest groups also try to influence public policy by bringing court cases. A groupmay use the courts to argue that a law or government policy is unconstitutional.

D. Lobbyists are representatives of interest groups who contact government officialsdirectly to influence their policy making. Lobbyists understand how government functions. They know where to go and whom to see. They know how to make friends and talk persuasively.

E. For lobbyists, information is an important resource. Lawmakers need informationabout issues. Lobbyists supply it. They suggest solutions to problems. They sometimesdraft bills for lawmakers to consider and testify in hearings on bills.

F. Once laws are enacted, lobbyists help to see that the laws are carried out, enforced,and stand up in court.

Discussion QuestionDescribe the characteristics of effective lobbyists. (Effective lobbyists understand howgovernment functions. They know where to go and whom to see. Of the hundreds of govern-ment departments, offices, and agencies, good lobbyists know which one to contact about aparticular concern. They are also talented public relations agents who know how to makefriends and talk persuasively.)

III. Techniques of Interest Groups (pages 273–274)

A. All interest groups want to influence public opinion both to increase their member-ships and to convince people of the rightness of their cause.

B. Many use direct mail to recruit members. They target potential members by usingsubscriber or membership mailing lists from magazines or groups with similar views.

C. Interest groups advertise on radio and television. They may organize protests or publicevents to get media coverage.

D. To promote their views, interest groups may use propaganda techniques such asendorsements, card stacking, the bandwagon, glittering generalities, symbols, “justplain folks,” and name-calling.

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Discussion QuestionHow can the card-stacking technique mislead people? (Card stacking can mislead peo-ple because it presents only one side of the issue, often by distorting the facts.)

IV. Regulation of Interest Groups (page 275)

A. Laws regulate the activities of interest groups to prevent abuses, such as winning law-makers’ votes by offering fancy meals and gifts.

B. The Federal Election Campaign Act limits the amount PACs may contribute to candi-dates for national office. The Federal Regulation of Lobbying Act requires lobbyists toregister and to disclose who hired them, how much they are paid, and how theyspend money related to their work.

C. These laws are not very effective. They apply only to people who spend most of theirtime lobbying. Also, the laws provide no means of enforcement.

D. Laws require a waiting period before former government officials can become lobby-ists. The purpose is to prevent ex-public officials from taking unfair advantage of theirinsider knowledge and friendships on behalf of interest groups. These laws have alsoproved inadequate.

E. Critics claim that campaign contributions give interest groups improper influence overofficeholders. Others point out that membership in interest groups with skilled lobby-ists give citizens a way to increase their influence.

Discussion QuestionLaws regulating interest groups generally have not been very effective. Why? (Theyapply only to people whose primary job is lobbying. People who claim that only a small partof their time is spent lobbying are not required to register. As a result, only a small portion oflobbyists are registered. Also, the laws do not provide any means of enforcement.)

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I. The Constitution and Federalism (pages 282–285)

A. The original 13 colonies behaved like individual nations. The national governmentunder the Articles of Confederation was weak and ineffective. Under the governmentcreated by the new Constitution, the states agreed to give up some independence.

B. The Framers created a federal system, or federalism, in which the central govern-ment and states share power. The sharing is not equal. When state and national lawsconflict, national law rules.

C. Federalism is a middle ground. The Framers wanted the national government to bestrong enough to be effective yet have some limits.

D. The Constitution says that no state can be divided or merged with another without its consent. It also allows states to maintain a militia. The governor may call on theNational Guard in local emergencies. The president may federalize the Guard.

E. The Constitution forbids states to make treaties with foreign countries, declare war,keep an army in peacetime, issue money, or impose import taxes. Amendments forbidstate governments from taking away civil liberties.

F. The Tenth Amendment says that states may exercise all powers not given to the federal government or denied to the states. These are reserved powers.

G. States use reserved powers to promote the health, safety, and welfare of their citizens.They set up police forces, build roads, run schools, and organize local governments.

H. Concurrent powers are powers shared by the state and federal governments.However, the supremacy clause in Article VI makes the laws of Congress the“supreme law of the land.” In McCulloch v. Maryland, the Supreme Court held thatwhen state and federal powers conflict, federal powers take precedence.

I. Supporters of states’ rights argue that because the states created the national govern-ment, all the national government’s power should be limited. They believe the statesare closer to the people and better reflect their wishes.

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The Federal System (pages 282–286)

Did You Know? Roman Catholic, or parochial, schoolsreceive little funding from the government. The First Amendmentto the Constitution forbids the establishment of a state religion.The Supreme Court has ruled in several cases that this means taxmoney may not be used to support parochial schools. As a result,parochial schools charge tuition and accept donations to pay fortheir operations.

J. Nationalists argue that people, not the states, created the national government andthe states. They believe that the “necessary and proper” clause of the Constitutiongives Congress the right to adopt any means it needs to carry out its powers.

K. The balance of power has shifted back and forth between the states and the nationalgovernment throughout American history.

Discussion QuestionIn what way does federalism represent a middle position? (Federalism is a middleposition between an all-powerful central government and a system in which the states domi-nate. The Framers wanted some limits on national power and yet not allow the states to be so strong—as under the Articles of Confederation—that the central government would beineffective.)

II. Governmental Cooperation (page 285)

A. The federal government provides grants-in-aid or money to the states to help payfor their programs. States must contribute some of their own money and follow therules set by Congress.

B. The federal government gives grants to cities and counties. Sometimes the moneygoes to the states first. The states then award grants to cities and counties, with condi-tions attached.

C. Article IV requires states to give “full faith and credit” to the laws and court decisionsof other states. This encourages interstate cooperation.

D. Article IV requires every state to have a “republican form of government.” The federalgovernment will defend state governments against invasion or domestic violence,such as a riot.

E. In return, states provide services to the federal government. For example, states con-duct federal elections. Also, states must approve constitutional amendments.

Discussion QuestionWhy is it important for states to give “full faith and credit” to the laws and courtdecisions of other states? (Accepting each other’s laws and court decisions encouragesinterstate cooperation. For example, all states recognize marriages performed in other states.)

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III. State Constitutions (page 286)

A. State constitutions vary, but they all provide for separation of powers among threebranches of government. They outline the organization of each branch, the powersand terms of office, and the method of electing officials.

B. State constitutions contain bills of rights that include all or most of the protections inthe U.S. Bill of Rights. Some include additional protections.

C. State constitutions establish different types of local governments, including counties,townships, municipalities, special districts, parishes, and boroughs.

D. State constitutions regulate the ways state and local governments can raise and spendmoney.

E. State constitutions establish state agencies, boards, and commissions.

F. A state’s constitution is the highest law in the state, but it may not clash with the U.S.Constitution.

G. The amendment process varies. In most states, an amendment must be first proposed,usually by the legislature, and then ratified by the voters.

Discussion QuestionHow are state bills of rights similar to and different from the U.S. Bill of Rights?(State bills of rights include all or most of the protections of the U.S. Constitution’s Bill ofRights. Often, they also include rights not provided for in the national Constitution, such asworkers’ right to join unions and protections for the physically challenged.)

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I. Makeup of Legislatures (pages 287–288)

A. State lawmaking bodies vary in name and size, but most states call them legislatures.Except for Nebraska’s unicameral, or one-house, legislature, every state has anupper house (the senate) and a lower house (usually the house of representatives).

B. Senators usually serve four-year terms; representatives, two-year terms. The houseusually has two to four times as many members as the senate.

C. Members of the legislature generally must be American citizens and live in the districtthey represent. Usually they must be at least 18 years old.

D. Ever-growing responsibilities have made membership in a state legislature a moredemanding, year-round job.

Discussion QuestionHow has service in state legislatures changed over the years? (Originally, service inthe state legislature required little of a member’s time. Many legislatures met for only a fewmonths every two years, and members received little more than token pay. Ever-growingresponsibilities, however, have made membership in state legislatures a demanding, year-round job. Pay has increased to suit the level of work.)

II. How State Legislatures Function (page 288)

A. A speaker of the house directs the house of representatives. A president or lieutenantgovernor directs the senate. The majority party selects the speaker and the senatepresident, except in states with a lieutenant governor.

B. Ideas for bills may come from the governor, the executive branch, individuals, or legislators.

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The State Legislative Branch (pages 287–290)

Did You Know? Many states run lotteries to raise fundswithout raising taxes. A “lottery” is a game of chance. People buytickets, and the state holds drawings for cash prizes. Most stateswith lotteries use some of the proceeds to fund education.Studies have shown, however, that lottery funds may not result inmore money for schools. In some states, lottery funds just substi-tute for, rather than add to, normal state funding for schools.

C. Once introduced, bills go to committees. The majority party selects the chairpersons.

D. Committees study and may revise bills. They may kill a bill or send it to the full housewith a recommendation to pass or reject. Conference committees work out differencesbetween versions passed by each house. A bill becomes law if both houses pass it andthe governor signs it.

Discussion QuestionWhat process does a bill follow on its way to becoming a state law? (After a bill isintroduced in the legislature, it goes to the appropriate committee. The committee studies it,holds hearings, and revises it as necessary. If the committee doesn’t kill it, it goes to the fullhouse. A conference committee works out differences between versions. Finally, if both housespass it and the governor signs it, it becomes law.)

III. Legislative Apportionment (page 289)

A. Every 10 years, when the national census is taken, state legislatures reexamine con-gressional districts.

B. State legislatures divide the state into a set of districts for senators and a different setfor representatives.

C. Senate districts were once based on land area. House districts were apportioned, ordivided among districts, based on population. The result was unequal representation.

D. In Baker v. Carr, the Supreme Court ruled that federal courts can hear suits to forcestate authorities to redraw electoral districts. Later, in Reynolds v. Sims, the Court heldthat both chambers of state legislatures must be apportioned by population.

Discussion QuestionWhat did the Supreme Court mean by “one man, one vote”? (The Court meant thatdistricts for both chambers of state legislatures must be apportioned on the basis of equal population.)

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IV. Problems Facing States (pages 289–290)

A. Americans demand more and better services from their state governments.

B. State governments are finding it difficult to pay for these services. Many legislatorsrefuse to vote to raise taxes because such a vote may reduce their chances for reelection. Also, the federal government has eliminated many grants.

C. State legislators face a difficult choice: Should they cut programs at a time whencrime, homelessness, and pollution are rising? Or, should they raise taxes and sufferthe political consequences?

Discussion QuestionWhat dilemma do state legislators face in funding programs? (Citizens want moreservices, but if legislators vote to raise taxes to pay for these programs, voters may not reelectthem. Yet if they don’t raise taxes, they will have to cut programs.)

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I. Office of Governor (pages 292–294)

A. The governor is a state’s chief executive. In most states, the governor must be an American citizen, at least 30, and a resident of the state for at least 5 years.

B. Most governors have previous political experience. Many have had successful careers in law or business.

C. Voters elect their governor directly. There is no state Electoral College.

D. A person running for governor must gain a nomination, usually by winning a partyprimary. Then the nominee runs in the general election.

E. Most governors serve four-year terms. They can be removed from office by impeach-ment or, in several states, by a recall election initiated by voters.

F. In most states, governors and lieutenant governors run as a team. The lieutenant governor presides over the senate and moves up if the governor leaves office.

G. As chief executive, the governor is responsible for carrying out state laws. Governorsappoint some top officials in the state bureaucracy, usually with senate approval. They usually prepare a budget and try to win its approval from the legislature.

H. Governors suggest new bills and lobby the legislature to pass them.

I. Governors may veto bills. While the president of the United States may veto an entirebill only, governors may choose to veto only a specific part of a bill. This is the line-item veto. The legislature may override a veto with a two-thirds vote.

J. Governors may grant pardons to convicted criminals or commute (reduce) their sentences. Governors may also grant parole, an early release from prison, withrestrictions.

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The State Executive Branch (pages 292–295)

Did You Know? In 1996, Gary Locke became the firstChinese-American governor in U.S. history. As a child, he livedwith his immigrant parents in a public housing project for familiesof World War II veterans. Later, he worked in his father’s grocerystore. Through part-time jobs, financial aid, and scholarships,Gary was able to attend Yale University, earning a degree in polit-ical science. He went on to earn a law degree from BostonUniversity and worked as a lawyer before beginning his politicalcareer.

K. The governor is commander in chief of the state National Guard. Governors are the leaders of their political parties and serve as ceremonial leaders as well.

L. No longer are governors always white males. Women, Hispanic Americans, AsianAmericans, and African Americans have served as governors.

Discussion QuestionWhat judicial powers does a governor have? (Governors may grant pardons to convictedcriminals or commute their sentences. They may also grant paroles.)

II. Executive Departments (pages 294–295)

A. Not every governor has a cabinet, but every state has officials in charge of executivedepartments who advise the governor. Some are appointed and others are elected.

B. Usually a secretary of state manages elections and maintains the state’s records. An attorney general represents the state and advises government officials. A treasurer collects taxes and invests state funds. An auditor reviews the records.

C. Most states have a board of health that runs programs in disease prevention andhealth education. Most have departments of public works and highways that maintain roads, bridges, and public buildings. Most have a state welfare board.

Discussion QuestionWho are the governor’s advisers? (Not every governor has a cabinet, but every state hastop officials who are in charge of executive departments and who advise the governor onissues related to their area of responsibility. Many are appointed, but some are elected.)

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I. Lower State Courts (pages 297–298)

A. The state court system handles most of the nation’s legal matters. State courts interpret and apply state and local laws.

B. The state court system has three tiers: courts for minor violations and lawsuits, courts for serious crimes and large civil suits, and appeals courts.

C. Many rural areas and small towns have a justice court, which handles less seriouscrimes called misdemeanors. Justice courts do not use juries. An elected justice of the peace hears and decides cases.

D. Larger towns may have police courts or magistrate courts. These courts handleminor offenses and civil cases involving sums usually less than $1,000.

E. Large cities have municipal courts, often divided into specialized areas such as traffic,juvenile, and small claims courts. In small claims courts, plaintiffs (people filing law-suits) and defendants (people being sued) speak for themselves, without lawyers.

Discussion QuestionWhat are the lower courts called in rural areas and small towns, in larger towns,and in large cities? (Rural areas and small towns have justice courts. Larger towns havemagistrate courts. Large cities have municipal courts.)

II. Higher State Courts (pages 298–299)

A. The second tier of state courts deal with felonies, or serious crimes, and civil casesinvolving large amounts of money.

B. Defendants charged with felonies are tried in general trial courts, which may be calleddistrict courts, county courts, common pleas courts, circuit courts, or superior courts.

C. Juries hear felony cases. The judge makes sure the trial is conducted fairly. The judgealso decides the penalty when a defendant is found guilty.

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The State Judicial Branch (pages 297–300)

Did You Know? Justices of the peace and mayors have the power to perform wedding ceremonies. Becausethese services are nonreligious, they are called “civil ceremonies.”

D. The third tier in most states is the appeals courts. A panel of judges decides the cases.If the judges feel the defendant did not get a fair trial, they can overturn the lowercourt’s decision.

E. The state supreme court reviews the decisions of appeals courts. It also interprets the state’s constitution and laws. Except for cases involving federal law or the U.S.Constitution, the decision of the state supreme court is final.

Discussion QuestionIn felony trials, what kinds of things do judges do to make sure the trial is conducted fairly and lawfully? (The judge rules on whether to permit certain evidence,rules on attorney’s objections, and guides the jury on points of law.)

III. Selection of Judges (pages 299–300)

A. Some state judges are elected by popular vote; others are elected by the state legisla-ture or appointed by the governor. Some states select judges through the MissouriPlan, which combines appointment and popular election.

B. Critics argue that judges who must win election may be more concerned with pleas-ing voters than administering the law impartially. Also, voters may know little ornothing about the candidates. Others argue that popular election of judges ensures a government “of the people, by the people, and for the people.”

C. Judges usually have terms of 6 to 12 years. Longer terms are intended to make judgesmore independent of public opinion.

D. Judges may be removed by impeachment. Most states also have boards that investi-gate complaints about judges. The board can make a recommendation to the statesupreme court, which may then suspend or remove a judge for wrongdoing.

Discussion QuestionHow are judges selected under the Missouri Plan? (Under the Missouri Plan, the governor appoints a judge from a list prepared by a commission. Then, in the next election,voters either reject or confirm the appointed judge.)

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I. Created by the State (pages 306–307)

A. Local governments are created by, and dependent upon, the state. The state may takecontrol or even do away with them.

B. Most states define a municipality as an incorporated place—a locality with an officially organized government that provides services to the residents. A city is amunicipal government.

C. Urban communities can create a city by incorporating. To do this, they apply to thestate legislature for a city charter that grants power to a local government.

D. To obtain a charter, the community must include a population of a certain minimumsize and submit petitions signed by residents supporting a charter.

E. The charter describes the type of government, its structure, and its powers.

F. Recently state legislatures have begun to grant home rule, allowing cities to writetheir own charters, choose their own type of government, and manage their ownaffairs, within state laws.

G. An urban community may be called a city, town, or village, depending on local pref-erence or charter specifications. Regardless of size, most city governments provide thesame basic services.

Discussion QuestionWhat basic services do most city governments provide? (Most city governments providelaw enforcement, fire protection, street repair, schools, water and sewage systems, garbagepickup, and parks and recreation.)

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City Government (pages 306–311)

Did You Know? More and more Americans are moving tothe suburbs surrounding cities. As the suburbs fill up, peoplemove farther out, expanding the suburbs over larger areas. Insome places, the suburbs around different cities have cometogether, leaving no rural area between them. The result is calleda “megalopolis.” The megalopolis that includes Boston, New YorkCity, Philadelphia, Baltimore, and Washington, D.C., extendsabout 600 miles along the coast. San Francisco, Los Angeles,and San Diego are spreading into a megalopolis as well.

II. The Mayor-Council Form (pages 307–308)

A. In a mayor-council form of government, power is divided between legislative andexecutive branches. Voters elect a mayor and the members of the city council.

B. The mayor is the chief executive and often appoints the heads of departments.

C. The council acts as the city’s legislature. It approves the budget and passes citylaws called ordinances. Councils usually consist of fewer than 10 members whoserve four-year terms.

D. Some cities are divided into voting districts called wards. Each ward elects acouncil member. Other councils consist of members-at-large elected by theentire city.

E. Large cities usually have a strong-mayor system, in which the mayor has strongpowers such as the power to veto ordinances, appoint and remove officials, andprepare the budget.

F. Even in large cities, council membership is usually a part-time job. A strongmayor usually works full time.

G. Smaller towns and a few big cities have a weak-mayor system in which themayor’s power is limited. The council appoints department heads and makes mostdecisions. The mayor presides over council meetings but votes only in case of a tie.

Discussion QuestionWhy do strong mayors tend to dominate city government? (Strong mayors tend todominate city government because membership on city council, even in large cities, is usuallya part-time job. Also, council members tend to focus on issues important in their part oftown. A strong mayor works full time, with a staff of assistants, and represents the entirecity.)

III. The Council-Manager Form (page 309)

A. The council-manager form is common in medium-sized cities and suburbs. The chiefexecutive is a professionally trained city manager who is not connected to any politi-cal party or interest group.

B. The council appoints and can remove the manager. The manager reports to the coun-cil as a whole.

C. Council members are usually elected in citywide at-large elections.

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D. City managers are not elected and are therefore free from political pressures thatcould interfere with getting the job done. They often have more expert knowledgethan the part-timers in council and thus may play a major role in policymaking.

E. Critics point out that because citizens do not elect the manager, the manager may not provide the strong unifying leadership needed in a large, diverse city.

Discussion QuestionHow might at-large elections influence the focus of council members? (Some peoplebelieve that the at-large system forces members to consider the interests of the entire cityinstead of just looking out for the concerns of their own neighborhoods.)

IV. The Commission Form (page 310)

A. A few cities use a commission form of government. They elect usually five commis-sioners in citywide elections. Each commissioner heads a department.

B. Commissioners perform executive duties for their departments and meet as a commis-sion to pass ordinances and make policy decisions. There is no separation ofpowers—commissioners are both legislators and executives.

C. The commissioners pick one member to act as mayor, whose role is largely ceremonial.

D. The commission system has drawbacks. No one person is in charge, making responsi-bility hard to pinpoint. New commissioners may know little about their departments.When commissioners disagree, it may be difficult to make decisions.

Discussion QuestionIn a commission form of government, who are the executives and who are the legislators? (The commissioners act as both executives and legislators—there is no separationof power.)

V. Special Districts (pages 310–311)

A. A special district is a unit of government that deals with a specific function, such aseducation, water supply, or transportation. Special districts may overlap cities.

B. A board or commission runs the special district. It has the power to collect taxes orcharge user fees for the services.

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Discussion QuestionGive an example of a special district. (The local school district is a common example of aspecial district. A water district is another.)

VI. Metropolitan Areas (page 311)

A. A metropolitan area is a central city and its surrounding suburbs. If it includes50,000 or more people, it is a Metropolitan Statistical Area. One that includes morethan one central city is a Consolidated Metropolitan Statistical Area.

B. Growth of population and expansion of industry in metropolitan areas have createdmany problems in transportation, pollution control, and law enforcement.Uncontrolled urban sprawl has created problems in land-use management.

C. Some large metropolitan areas have a council of governments, in which the centralcity joins with its suburbs to make areawide decisions about growth.

Discussion QuestionDescribe urban sprawl. (At or just beyond city limits, shopping malls, franchise restau-rants, and superstores line major roads clogged with traffic.)

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I. Counties (pages 312–314)

A. The county is normally the largest territorial and political subdivision of a state.Counties vary greatly in population and land area.

B. In the 1800s, the county courthouse was the center of government. The towns wherethe county courthouse is located are called county seats.

C. A board of three to five elected commissioners governs most counties. Most servefour-year terms. Boards serve as the legislature, but some also have executive powers.

D. The sheriff is the county’s chief law enforcement officer. The sheriff’s department,including deputies and jailers, enforces court orders and manages the county jail.

E. The district attorney, the county’s prosecutor, investigates crimes, brings charges, andprosecutes cases in court. The coroner tries to establish the cause of unusual deaths.

F. The county clerk keeps government records and supervises elections. The assessorestimates the worth of taxable property. The treasurer supervises county funds, makespayments, and may serve as tax collector. The auditor supervises the treasurer’s workto make sure that no county money is spent without the board’s approval.

G. In some areas, cities handle most services. In others, county governments have grownmore important. Many counties provide water, sewer, and sanitation services. Manyoperate hospitals, police departments, and mass transit systems.

H. Some counties have adopted a new form of government in which the board acts onlyas a legislature. An elected chief administrative official, or county executive, handlesall executive duties. Sometimes the board appoints a county manager.

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County Governments (pages 312–314)

Did You Know? Almost all counties in the United Stateshave at least one county agricultural extension agent. The job ofthe county agent is to help farmers solve agricultural problems. Incities as well as in rural areas, agents offer advice on gardeningand insect control. They may even assist the leaders of the local4-H club. The Cooperative Extension System is the sharedresponsibility of federal, state, and county governments.

Discussion QuestionWhy did states in the 1800s draw counties relatively small? (In the 1800s, the stateswanted to draw counties small enough that residents living in the farthest corners of a countycould get to the county courthouse and back by horse and buggy in the same day.)

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I. Town Government (pages 315–316)

A. Smaller political units within counties are called towns in New England and town-ships in the Midwest and elsewhere. Areas within towns or townships may beincorporated into villages.

B. In New England, town governments handle most community needs while countiesare mainly judicial districts. In other states, townships and counties share authority, or there may be no townships at all.

C. In the New England Colonies, colonists met regularly to discuss issues. These townmeetings, a form of direct rather than representative democracy, became the localgovernment.

D. New England states still have a town form of government. Residents meet once ayear to discuss what the town should be doing.

E. Town meetings occur so rarely that they are useful only for broad policymaking. Foreveryday government, each New England town elects a group of “selectmen” andsometimes a clerk, treasurer, and tax assessor.

F. Direct democracy has become impractical. Some New England towns now use repre-sentative town meetings. Others have eliminated meetings and instead have a towncouncil to run the government.

Discussion QuestionHow is a representative town meeting different from the traditional town meeting?(Traditional town meetings were direct democracies in which all residents could meet andmake decisions for the town. In representative town meetings, elected representatives make thedecisions instead of the people as a whole.)

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Towns, Townships, and Villages (pages 315–318)

Did You Know? Before newspapers were common, theAmerican colonies often appointed a “town crier.” The town crierwould stroll from street corner to street corner, calling out the latest news and the times for town meetings and other events.

II. Township Governments (pages 317–318)

A. Townships are smaller than New England towns but have similar governments.

B. As the United States expanded west in the early nineteenth century, Congress dividedthe unsettled land into six-mile squares. The settlers set up local governments calledcivil townships. Midwestern townships today still have the original square borders.

C. Most townships elect a small township committee, board of supervisors, or board oftrustees to act as a legislature and administer services.

D. Villages, the smallest local units, almost always lie within the boundaries of otherlocal governments.

E. Residents may request permission from the state to incorporate as a village, city, ortown if they are dissatisfied with the services of the township or county. They maywant to control their own police force, library, or recreational facilities.

F. Most village governments consist of a small board of elected trustees. Some also electan executive called the chief burgess, president of the board, or mayor. Large villagesmay hire a professional city manager.

G. The village board may collect taxes and spend the money on projects such as streets,public libraries, and recreational facilities.

H. Village residents often pay higher taxes to support the extra layer of government. In return, they usually get better services.

Discussion QuestionWhy do residents of a village often have to pay higher taxes? (Village residents mustsupport an extra level of government.)

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How a Community Handles Issues (pages 324–327)

Did You Know? Zoning is a way for local governments tocarry out their plans for land use. Zoning laws divide the commu-nity into zones. Some zones allow businesses or industry. Othersallow only residences. The laws often specify the size of land lotsand require certain building features. Through zoning laws, localgovernments can control population density and help build thekind of community that residents want.

I. Making Public Policy (pages 324–325)

A. Organizations have policies, or a set of rules that guide decisions and actions. Publicpolicy is a general agreement among government leaders about how to deal withissues or problems that affect the entire community.

B. Ideas for public policy can come from many sources. Citizens are an important source,especially at the local level. A single person can have great impact, as Candy Lightner,founder of MADD, illustrates.

C. Changing public policy may take months or years. Governments do research, holdhearings, and argue over what policy should be. The result may be a compromise.

Discussion QuestionWhere do ideas for public policy come from? (Ideas may originate with government.Party leaders, interest groups, and even the media may propose them. Private citizens are animportant source, especially at the local level.)

II. Planning for the Future (pages 325–327)

A. Public policies try to foresee and prevent problems. Local planning commissions makeland-use plans for many communities.

B. A short-term plan is a policy to be carried out over the next few years. A long-termplan is a broader, less detailed plan that serves as a guide for 10, 20, or even 50 years.

C. Long-term plans require educated guesses. For example, the city may plan streetreconstruction to carry increased traffic from anticipated new subdivisions.

D. Planning requires answering difficult questions. For example, how might a growingpopulation strain the town’s infrastructure—its system of roads, bridges, water, andsewers? Should the town build new roads or promote public transportation? How willthe town pay for the work?

E. Priorities are the goals a community considers most important. To set priorities, thecommunity must first determine what it values most. Then it must determine specificgoals and rank them in order of importance.

F. Next, a community must determine its resources—the money, people, and materialsavailable to accomplish the community’s goals.

G. Based on priorities and resources, a planning commission makes a master plan. Thisplan states the goals and explains how the government will carry them out to meetchanging needs over time.

H. If the government decides to accept the commission’s plan, the plan becomes publicpolicy, and the government is then responsible for carrying it out. The city or towncouncil must approve funds for the projects in the plan. The mayor’s or manager’steam writes rules and regulations to enforce the plan.

Discussion QuestionWhat steps does a community follow in creating a master plan? (The community firstdecides what it values most. It then determines specific goals and sets priorities by ranking thegoals in order of importance. It then determines its resources. Based on the priorities andresources, the community creates a master plan.)

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I. Public Education (pages 329–332)

A. Local governments began offering free public education in colonial times. Today, elementary and high school education remains a local responsibility under stateguidelines. The local school district is the basic administrative unit.

B. The federal government provides some school funding but imposes rules, such as prohibiting gender discrimination and meeting the needs of disabled students.

C. The recent “No Child Left Behind Act” authorized additional federal funds for schoolsbut also increased the rules. Students must take state tests intended to hold schoolsaccountable for students’ learning.

D. School funds largely come from property taxes. Therefore, districts in wealthy suburbswith high property values have more to spend on education than those in run-downneighborhoods and lower property values. As a result, not all students receive thesame high-quality education.

E. Nonfinancial problems include low test scores, high dropout rates, and crime and violence on school property. Many of these problems are rooted in broader socialproblems, such as poverty, broken families, and substance abuse.

F. To improve academic performance, many states are trying charter schools. Theseschools receive state funding but are excused from meeting many regulations toencourage innovation.

G. Opponents say charter schools take funds and the best students away from publicschools. Preliminary studies indicate that charter schools are no more innovative than public schools and are not luring the best students.

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Education and Social Issues (pages 329–333)

Did You Know? Some large police forces have a special unitcalled the search-and-rescue team. SAR officers look for peoplelost in the wilderness or trapped in the debris of natural disastersor terrorist attacks. Their training includes rock climbing, wilder-ness survival, and other skills. An especially valuable member ofthe team is the rescue dog. These canine rescuers can locatehuman scent in dark or heavily wooded areas where human sightis limited. Rescue dogs worked valiantly in the debris of theSeptember 11, 2001 attacks.

H. Some places are experimenting with tuition vouchers—a kind of governmentmoney order. Parents can use the vouchers to pay for their children to attend privateschools.

I. Opponents say vouchers shift funds from public to private schools. Also, vouchersmay violate the First Amendment because they can be used to pay tuition at religiousschools. The Supreme Court is now reviewing the constitutionality of vouchers.

J. In a few cases, a private company runs the school. Opponents argue that companieswill cut corners on education to increase profits.

K. Some states require students to pass competency tests in order to be promoted to thenext grade or receive a high school diploma.

L. Supporters of competency testing claim it holds schools and teachers accountable.However, many teachers claim that it forces teachers to spend class time teaching students how to pass tests instead of how to understand the subjects.

Discussion QuestionWhy are high dropout rates and violence in schools difficult problems for schoolsto solve? (Many of the remedies for such problems necessarily must take place outside theschools because the problems are rooted in the broader social problems of poverty, brokenfamilies, drug abuse and alcoholism, and crime and violence in the streets.)

II. Crime (page 332)

A. Crime rates are usually highest in large cities, where many people struggling withpoverty may see robbery and drug dealing as a way to a better life.

B. Cities have the country’s largest police forces. Sheriffs and their deputies enforce thelaws in rural areas. Every state also has a highway patrol or state police. Its mainresponsibility is highway safety, but it also deals with crimes and suspects.

C. Besides enforcing the law, police officers work to keep the peace. They settle disputesand provide services, such as directing traffic.

D. Under the community policing program, police become a visible presence in neigh-borhoods. The program also gets residents involved in neighborhood watches.

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Discussion QuestionWhy are crime rates usually highest in large cities? (In large cities, poverty and crimeoften go hand in hand. For poor people who have struggled with low-paying jobs, robbery ordrug dealing may seem like a better way to make a living. Many of the poorest students dropout of school early and spend much of their time on the streets. Crime is often the only lifethey know.)

III. Social Programs (page 333)

A. Government uses welfare programs to help Americans suffering from ill health, oldage, poverty, and disabilities.

B. Critics of welfare claim that it undermines self-respect among the poor and encour-ages dependency. Defenders say that it is the only way poorly educated, unemployedsingle mothers and their children can avoid homelessness and hunger.

C. Under the Temporary Assistance for Needy Families Act (TANF), the federal govern-ment gives money to the states to pass on as welfare payments to poor people. Thestates mostly decide who is eligible and how much they get.

D. The act sets a five-year lifetime limit on receiving welfare, and states must developjob-training programs to help the poor become self-sufficient.

E. The number of people on welfare dropped sharply after the passage of TANF in 1996.Critics claim that the drop is due mostly to the booming economy and labor shortageof the late 1990s. Some fear that in an economic slump, people forced off welfarewon’t be able to find jobs and will be helpless.

Discussion QuestionHow does TANF work to move poor people from welfare to work? (The act sets afive-year limit on receiving welfare. This forces people to leave welfare roles. To help them getjobs and become self-sufficient, the act requires states to develop job-training programs forthem.)

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I. The Emergence of Environmentalism (pages 334–335)

A. Every time we drive a car or throw away trash, we are harming our environment.

B. The Environmental Protection Agency, created by the Clean Air Act, sets environ-mental goals and standards. State environmental protection departments must complyby monitoring air and water quality and inspecting industrial facilities.

C. Americans produce millions of tons of solid waste, or garbage, each year. Most isdumped in landfills, which are filling up fast. In some areas, rainwater seepingthrough landfills has damaged streams and underground water.

D. Opposition from citizens makes it difficult for governments to find new sites. No onewants a landfill “in my backyard.”

E. Much solid waste is burned rather than dumped in landfills. However, toxic sub-stances in the smoke can cause air pollution.

F. Another alternative is recycling, or reusing old materials to make new ones. Mostcommunities have programs to recycle paper, metal cans, plastic, and glass bottles.

G. Not all waste is recyclable, and many people do not participate. Also, economic slow-downs can cause recycling companies to pay local governments less for the materials.As a result, local governments may spend less on curbside pickup.

H. Conservation is the careful preservation and protection of natural resources. We canconserve by buying products in recyclable rather than throwaway containers.

Discussion QuestionWhat are some ways that stores and businesses can help conserve resources? (Somestores offer customers a rebate if they return bags or use their own shopping bags. Businessescan eliminate unnecessary product packaging.)

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Environmental Issues (pages 334–337)

Did You Know? Recently the state of California classifieddiscarded televisions and computer monitors as hazardouswastes. The glass and shielding components contain lead thatcan be dangerous if dumped in landfills. Californians must nowrecycle these items or dispose of them at hazardous waste facili-ties. It is illegal to put them in the trash.

II. Threat of Hazardous Waste (page 336)

A. Hazardous waste can be toxic or cause cancer. Hazardous waste includes radioactivewaste from nuclear power plants as well as runoff from pesticides sprayed on plantsand from improperly discarded used motor oil, auto engine coolant, and batteries.

B. Ocean dumping ended in 1970. Now, hazardous wastes must be disposed of on land.At present, there is no truly safe way to do this. Serious health problems from toxicwaste sites have caused entire communities to abandon their homes.

Discussion QuestionWhy is hazardous waste a threat to the environment? (Much of hazardous waste maybe toxic or the byproducts of industry that can cause cancer. There is currently no truly safeway to dispose of hazardous waste.)

III. Protecting the Air and Water (pages 336–337)

A. Fumes from cars and trucks, toxic gases from factory smokestacks, and even cigarettescontribute to air pollution.

B. Chemical waste from factories causes most water pollution. Some factories havedumped chemicals directly into rivers and streams. Others have buried it, allowing itto seep into underground water supplies.

C. Federal regulations limit the amounts and kinds of waste that factories may discharge.Budget limitations keep many regulations from being strictly enforced.

D. Cars and trucks are the worst air polluters in most cities. To help, the federal govern-ment required the removal of lead from gasoline. It also required the automobileindustry to develop more fuel-efficient and cleaner-burning engines.

E. To persuade people to drive less, local governments are improving public transporta-tion systems and creating carpool lanes.

F. Smoking is a source of indoor as well as outdoor air pollution. Many areas havepassed no-smoking ordinances affecting restaurants and bars. Almost all states regu-late smoking in public buildings.

Discussion QuestionHow do carpool lanes encourage people to drive less? (Carpool lanes help people get towork faster. To use these lanes, however, cars must be carrying two or more people. Becausethey are riding instead of driving, these passengers mean that fewer cars are on the road.)

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I. Functions of Law (pages 344–345)

A. American society developed around the principle of “a government of laws, and notof men.”

B. Laws are rules that allow people to live peacefully in society. Laws guarantee individ-ual liberties because they are binding on everyone. People, organizations, andgovernments can deal with one another because all know which acts are permittedand which are not.

C. To discourage criminal acts, laws set punishments and establish a justice system toenforce the laws. Laws also set rules to resolve civil disputes.

D. To be effective, laws must be fair and treat all people equally. They must set punish-ments that fit the crime. Ordinary people must be able to understand them, andgovernment must be able to enforce them. Most people will obey reasonable laws.

E. The Founders based the nation’s system of laws on traditions and laws passed downfrom generation to generation.

Discussion QuestionWhy is law enforcement easier if the laws are understandable, reasonable, andfair? (If most people understand the laws and believe they are reasonable and fair, most willobey the laws, and law enforcement becomes easier.)

II. Early Law (pages 345–347)

A. Laws of early human societies were probably passed to the next generation orally.

B. The first known system of written law was the Code of Hammurabi, a collection of282 laws compiled by King Hammurabi of Babylonia in about 1760 B.C.

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The Sources of Our Laws (pages 344–347)

Did You Know? In 621 B.C., the Greek lawmaker Draco cre-ated the first written code of law in Athens. Until then, the lawshad been unwritten and known only to a few judges. The codeenabled everyone to know the laws. However, Draco’s code madealmost every crime punishable by death. Today, we use the word“Draconian” to mean “severe” or “harsh.”

C. The Hebrews of ancient Palestine followed the Ten Commandments found in theBible. Commandments like “thou shalt not kill” are reflected in our laws today.

D. The Romans called their law jurisprudence, a word we use today to mean the studyof law. As in the Code of Hammurabi, Roman penalties for offenses were drastic.

E. Over centuries, the Roman senate adopted many laws, and Roman judges wrote commentaries on them, which became part of the law. Later Roman emperors createdlaws by issuing edicts, or commands. The laws spread as the Roman Empire grew.

F. Emperor Justinian I boiled down Roman law into an orderly body of rules called the Code of Justinian. This code became the basis of law for the Byzantine Empire.Roman law also became part of the canon law of the Roman Catholic Church.

G. More than a thousand years later, French emperor Napoleon updated the JustinianCode and called it the Napoleonic Code. Napoleon conquered much of Europe, andthe code went with him. Later, Europeans carried it to Asia and Africa.

H. American laws are based mainly on the English system of common law, or lawbased on court decisions rather than on legal code. When early English judges heard a case, they looked in the books for a similar case and followed the earlier ruling, orprecedent. Precedents are legal opinions that became part of the common law.

I. English judges blended Roman law and canon law into the body of common law. Thelaw came to include basic rights such as trial by jury and innocent until proven guilty.

J. As the English Parliament gained power, acts of Parliament—written statutes—cameto dominate the English legal system. English settlers in North America brought theirtraditions of common law and citizens’ rights with them. Today, common law formsthe basis of our legal system, including the tradition of following precedents.

Discussion QuestionWhy does most of the world today live under some form of Roman law? (TheNapoleonic Code was an update of the Justinian Code, which was based on Roman law.When Napoleon conquered much of Europe, his code went with him. Later, Europeans carried it to Asia and Africa.)

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I. Criminal and Civil Law (pages 348–350)

A. Criminal laws seek to prevent people from deliberately or recklessly harming eachother or each other’s property.

B. American courts operate on an adversary system. Lawyers for opposing sides present their cases. The judge plays an impartial role.

C. Critics of the adversary system argue that it encourages lawyers to ignore unfavorableevidence. Supporters claim that it is the best system to bring out the facts of a case.

D. In criminal cases, the government is always the plaintiff—the party that bringscharges against the defendant—the individual or group being sued. Most criminalcases are titled in terms of the state against the defendant.

E. Felonies are serious crimes, such as murder, rape, and robbery. Misdemeanors areless serious offenses, such as vandalism or stealing inexpensive items. Misdemeanorsare usually punished with a fine or jail sentence of less than one year.

F. Civil cases involve disputes between people or groups, in which no criminal laws have been broken. A civil case is called a lawsuit—a legal action in which a personor group sues to collect damages for some harm done.

G. In civil cases, the plaintiff believes the defendant is to blame for some damage or loss of something of value. The dispute may involve a contract in which one partybelieves the other did not fulfill the terms of the agreement.

H. Another type of dispute involves torts, or civil wrongs. In tort law a person may suffer an injury and claim that another party’s negligence was the cause.

I. Family law, another type of civil law, deals with issues such as divorce, child custody,adoption, and child support.

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Types of Laws (pages 348–351)

Did You Know? The International Court of Justice, or WorldCourt, deals with disputes between nations. The United Nationsselects judges that represent all the world’s major civilizationsand legal traditions. No two judges may come from the samecountry. Only governments, not individuals, may bring cases tothe World Court.

Discussion QuestionWhy are criminal cases titled in terms of the state against the defendant? (In crimi-nal cases, the government is always the plaintiff. This is because the American system ofjustice assumes that society is the victim when a crime is committed. Titling criminal cases thisway shows that the government, rather than an individual crime victim, is bringing actionagainst the defendant.)

II. Public Law (pages 350–351)

A. Public law, or constitutional law, involves rights guaranteed under the Constitution or spelled out in legislation. It guides courts and legislatures when they deal withpunishments and fines. Constitutional laws are the highest laws in the land.

B. Administrative law includes all the rules and regulations that government agenciesissue to carry out their jobs.

C. Statutory law includes laws written by the legislatures at all levels of government.They establish rules such as speed limits and the minimum age for a work permit.

Discussion QuestionIf a defendant claims he was a victim of an unreasonable search and seizure, whatkind of case is it? Explain. (It would be a constitutional law case because it involves a pos-sible violation of the Constitution’s Fourth Amendment.)

III. International Law (page 351)

A. International law comprises treaties, customs, and agreements among nations.Violations may be brought to the International Court of Justice, or World Court,located in The Hague, the Netherlands.

B. The United Nations established the World Court to hear disputes that nations bringagainst other nations. The World Court has no enforcement powers. It must rely onthe willingness of the parties to accept its rulings.

Discussion QuestionWould international law be involved in disputes over trade regulations? Explain.(Yes, international law involves disputes between nations. The parties in a trade disputewould most likely be different nations.)

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I. Legal Protections in the U.S. Constitution (pages 352–354)

A. American colonists owed their rights to legal principles developed in England.Although written statutes have replaced common law, courts still refer to common-law principles when no statutes exist for a given issue.

B. The Constitution gives each branch of government a role in shaping laws.

C. Courts base their rulings on written laws and on precedents of earlier cases. Judgesthen use these rulings to decide similar cases in the future. This process is called stare decisis, for “let the decision stand.”

D. Article I provides a safeguard against being kept in jail unlawfully. It includes the writof habeas corpus, which requires an official who has arrested someone to bring thatperson to court and explain why he or she is being held.

E. Article I forbids enactment of a bill of attainder—a law that punishes a personaccused of a crime without a trial or fair hearing in court. It also forbids an ex postfacto law, which would allow a person to be punished for an action that was notagainst the law when it was committed.

F. The Fifth and Fourteenth Amendments guarantee due process of law—the govern-ment may not take our lives, liberty, or property without the proper exercise of law.

G. The equal protection clause of the Fourteenth Amendment requires the governmentto treat all people equally, regardless of gender, race, or religion.

H. A person can be convicted of treason for waging war against the United States, joiningits enemies, or giving aid and comfort to the enemy. The Constitution defines treasonso that the government cannot misuse the law to punish people for political acts.

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The American Legal System (pages 352–358)

Did You Know? The court gathers names for jury servicefrom lists of taxpayers and voters and from telephone books.People from the list are then summoned for possible service.Prospective jurors are asked a series of questions by the judge orthe lawyers in the case. Jurors are expected to answer the ques-tions truthfully. The process is known as “voir dire,” meaning “tospeak the truth.”

Discussion QuestionWhat groups have used the equal protection clause of the Fourteenth Amendmentto support their causes? (The equal protection clause has been the major civil rights tool ofminorities and women challenging laws or government policies that discriminate against them.)

II. Rights of People Accused of Crimes (pages 354–358)

A. Rights of accused people are based on the idea that a person is presumed innocentuntil proven guilty in court. The prosecution must prove guilt. The defendant doesnot have to prove innocence.

B. The Fourth Amendment protects against “unreasonable searches and seizures.” Tointrude on someone’s property, police must first get a search warrant—a judge’sauthorization specifying the place to be searched and items that may be seized. Policemust have good reason to believe that the wanted person or evidence can be foundthere.

C. In Mapp v. Ohio, the Supreme Court established the exclusionary rule. If police gainevidence in a way that violates the Fourth Amendment, the evidence may not beused in court.

D. The Fifth Amendment states that people do not have to say anything that mightincriminate themselves. They can “take the Fifth” and decline to answer questions.

E. In Miranda v. Arizona, the Supreme Court held that police must inform suspects thatthey have the right to remain silent, but this right may not be used to obstruct justice.

F. The Fifth Amendment bans double jeopardy. Once tried and found not guilty, a person may not be tried again for the same crime.

G. The Fifth Amendment says that people accused of serious federal crimes must bebrought before a grand jury. If the grand jury decides there is enough evidence to proceed to trial, it indicts or issues a formal charge against the person.

H. The Sixth Amendment says that an accused person has the right to a lawyer. InGideon v. Wainwright, the Supreme Court interpreted this to mean that if the accusedcould not afford a lawyer, the state must provide one.

I. The Sixth Amendment says that accused people must be informed of the accusationsagainst them. They have a right to a speedy and public trial by an impartial jury andmay question witnesses against them. Impartial means that jury members must notknow anyone involved in the case and must not have made up their minds before trial.

J. Jury members usually come from the area where the crime was committed. In federalcourts, all trial juries, called petit juries, have 12 people who must reach a unanimousdecision. States have juries of 6 to 12 members.

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K. Defendants may choose to have a bench trial—appear before a judge without a jury.

L. Few criminal cases come to trial. Most are settled through plea bargaining. Thedefense attorney and prosecutor negotiate. The prosecutor offers the defendant achance to plead guilty to a less serious crime in exchange for receiving a less severepenalty. A judge must agree to the plea bargain.

M. Plea bargains reduce the time and expense of a trial. They also reduce the huge volume of cases courts must process.

N. The Eighth Amendment outlaws “cruel and unusual punishments.” The punishmentmust fit the crime.

O. The Supreme Court ruled in Furman v. Georgia that the death penalty as then admin-istered was not constitutional. It was being imposed in unfair ways and mainly onAfrican Americans and poor people. In response, most states revised their deathpenalty laws to comply with the Court’s guidelines.

P. The Eighth Amendment prohibits “excessive bail.” Bail is money an arrested personpays to a court to win release from jail while awaiting trial. Its purpose is to guaranteethat the person will return for trial. After the trial, the person gets the money back.

Q. Courts may not set bail so high that a person is unfairly forced to stay in jail. In casesinvolving serious crimes, however, the judge may set a very high bail. In extremecases, like murder, or if the arrested person is likely to flee, the judge may deny bail.

Discussion QuestionWhy might defendants agree to a plea bargain? (People often agree to plea bargains to cut down on the expense and time of a trial or to get a lighter sentence if they fear conviction.)

III. Our Legal Responsibilities (page 358)

A. Americans have a responsibility to serve on a jury and testify in court.

B. Americans have the responsibility to obey laws and cooperate with law enforcementofficials.

C. Americans must work peacefully to change unfair, outdated laws.

Discussion QuestionHow can Americans work peacefully to change unfair, outdated laws? (This mightinvolve gathering voters’ signatures on petitions to place an issue on the ballot for a vote orasking legislators to change the law.)

I. Types of Civil Lawsuits (pages 364–365)

A. In civil cases the plaintiff—the party bringing a lawsuit—claims to have suffered a loss and usually seeks damages, an award of money from the defendant. Thedefendant—the party being sued—argues either that the loss did not occur or that the defendant is not responsible for it.

B. Lawsuits involving a few thousand dollars or less are often handled in a small claimscourt, where people act as their own attorneys.

C. Lawsuits may involve property disputes, breach of contract, or divorce. A negligencesuit is filed when a person has been injured or killed or when property has beendestroyed because someone else has been careless or negligent.

D. Equity is a system of rules by which disputes are resolved on the grounds of fairness.People may file a suit in equity to seek fair treatment in a situation in which no lawexists to decide the matter. An equity court may stop a wrong before it occurs.

E. A judge decides suits in equity. The judge may issue an injunction, or court ordercommanding a person or group to stop a certain action.

Discussion QuestionSuppose someone installs a pool but does not build a fence around it. A neighbor’schild falls into the pool and drowns. What type of lawsuit might the child’s parentsfile? Explain. (The parents might file a negligence suit. They could claim that the neighborwas negligent for not building a fence to reduce the hazard posed by the pool.)

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Civil Cases (pages 364–367)

Did You Know? A malpractice suit is a civil lawsuit thataccuses a professional person, usually a doctor, of causing injurythrough carelessness or error. The number of malpractice suitsand size of the awards have been increasing. Some awards havetopped $1 million. To protect themselves, some doctors orderexpensive laboratory tests. Some will no longer perform morerisky procedures. Doctors buy expensive malpractice insurance,and they pass the cost along to patients in the form of higherfees. All of these actions contribute to the rising cost of healthcare.

II. What Happens in a Civil Case? (pages 365–367)

A. A lawsuit starts when the plaintiff’s lawyer files a complaint—a formal statementnaming the plaintiff and the defendant and describing the nature of the suit. Thecourt then sends the defendant a summons, a document telling him of the suit and requiring him to appear in court at a certain time.

B. The defendant may respond by having his lawyer file an “answer” to the complaint.The answer may admit to the charges or deny responsibility. The complaint andanswer together are called pleadings.

C. During the discovery process before the trial, both lawyers check facts and gatherevidence by questioning the other party and witnesses.

D. The judge may call a pretrial conference with both parties. If the case is weak, theplaintiff may decide to drop the suit. If it is strong, the defendant may offer a settle-ment of some amount of money the defendant will pay the plaintiff.

E. Another way to resolve disputes is through mediation. A trained mediator does notdecide the case, but serves as a neutral party to help the two sides reach an agreement.

F. The two sides may choose arbitration. A professional arbitrator reviews and resolvesthe dispute, and the arbitrator’s decision is usually binding on both parties.

G. Most civil cases are settled before trial for several reasons. First, parties often prefer anegotiated outcome to the uncertain outcome of a trial. Second, it may take years fora case to come to trial. Third, trials are expensive and time-consuming.

H. If the parties do not settle, the case goes to trial. A jury of 6 to 12 members or, morelikely, a judge will hear the case. First the plaintiff and then the defendant present.

I. The plaintiff has to present a “preponderance of evidence”—enough to persuade thejudge or jury that the defendant is likely to be responsible for the incident. This is alower standard than prosecutors must meet in criminal cases.

J. The judge or jury considers all evidence and decides on a verdict in favor of one ofthe parties. If the plaintiff wins, a remedy is set. If the defendant wins, the plaintiffgets nothing and must pay court costs.

K. If the losing side believes the judge made errors or some injustice occurred, it mayappeal to a higher court. Cases involving large awards are often appealed. As a result,the winning plaintiff may wait years for the money and may end up with nothing.

Discussion QuestionHow is mediation different from arbitration? (A mediator helps the two sides reach anagreement, but does not decide the case. An arbitrator does make a decision that is usuallybinding on both parties.)

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I. Types of Cases (pages 368–370)

A. In criminal law cases the government charges someone with a crime and is alwaysthe prosecution. The accused person is the defendant.

B. A crime is an act that breaks a federal or state criminal law and causes harm to people or society in general. Each state has a set of written criminal laws, called the penal code, that spells out punishments for each crime.

C. Felonies are serious crimes, and misdemeanors are minor violations.

D. Criminal penalties punish criminals and protect society by keeping dangerous crimi-nals in prison. They serve as a warning to deter others from committing the samecrime. Criminal penalties are also intended to help prepare lawbreakers to reentersociety after their prison terms end.

E. In some cases, a parole board may decide to grant a prisoner parole, or early release.In these cases, the person must report to a parole officer until the sentence expires.

F. Some states require mandatory sentencing, in which judges must impose whateversentence the law directs. In other systems, a judge imposes a minimum and maxi-mum sentence. Under any system, similar crimes should receive similar sentences, but judges have some leeway to consider the unique circumstances of each case.

G. Crimes against people include murder, manslaughter (accidental killing), assault(physical injury or threat of injury), rape, and kidnapping.

H. Crimes against property include larceny (burglary, robbery, and theft), vandalism(deliberate destruction of property), and fraud (taking property by dishonest means.)

I. Crimes such as unauthorized gambling and illegal drug use are considered victimlesscrimes, because there is no victim to bring a complaint.

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Criminal Cases (pages 368–373)

Did You Know? In colonial America, jail was not the usualpunishment for a crime. Jails were just used to hold peopleawaiting trial or punishment. For minor offenses, the punishmentusually involved some form of “shaming” or public humiliation.The offender might be locked in stocks located in the center oftown. Stocks were hinged wooden frames with holes for securinghands and feet. Townspeople would hurl insults and sometimesobjects at the prisoner. The prisoner might remain confined in thestocks for hours or even days.

Discussion QuestionWhy did some states establish mandatory sentencing? (Critics of the parole systemclaim that many sentences end up much shorter than intended because of it. In answer to thiscriticism, some states have established mandatory sentencing, which requires judges to imposewhatever sentence the law directs.)

II. What Happens in a Criminal Case? (pages 370–373)

A. Officers make arrests if they have witnessed a suspected crime, if a citizen has report-ed a crime, or if a judge has issued an arrest warrant.

B. At arrest, the officer informs the person of four rights: the right to remain silent, tohave an attorney present during questioning, to have a court-appointed attorney ifthe person cannot afford one, and to stop answering questions at any time.

C. The suspect is then booked, or charged with a crime. Police take fingerprints and aphotograph. The suspect may call a lawyer at this time.

D. In a few hours, the suspect appears in court. The prosecution must show the judgeprobable cause—a good reason—to believe the accused committed the crime. Thejudge then sends the accused back to jail, sets bail, or releases him on his own recognizance (without bail) with a promise to appear in court when called.

E. In federal and many state courts, a grand jury decides whether to indict. In somestates, a preliminary hearing is used instead. In others, the prosecutor files an “information” and the judge decides whether to indict.

F. The defendant then appears for an arraignment and must enter a plea. If the defen-dant pleads not guilty, the case continues. If the plea is guilty, the defendant standsconvicted and the judge determines the punishment. A plea of no contest means that the defendant does not admit guilt but will not fight the charges.

G. A plea bargain is an agreement in which the accused agrees to plead guilty, but to a lesser charge. This avoids a lengthy trial and ensures a punishment.

H. Criminal defendants have a right to a jury trial, but many choose to be tried by ajudge alone in a bench trial.

I. For a jury trial, both sides select potential jurors from a large pool of residents withinthe court’s jurisdiction. Both can reject some candidates.

J. The lawyers for each side outline their case in an opening statement. The prosecution and defense then present their case in turn. They call witnesses who give testimony—answers given under oath. The other side may cross-examine witnesses to try to discredit their testimony.

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K. In closing statements, both sides highlight the evidence most favorable to their case.The judge then “instructs” the jury on the law that relates to the case.

L. The jury goes off to discuss the case. They choose a foreman or forewoman to leadthe discussion. Deliberations are secret and have no time limit. Finally, they vote.

M. A guilty verdict means the jury found the evidence convincing “beyond a reasonabledoubt.” Most states require a unanimous vote. Acquittal is a vote of not guilty.

N. If the jury cannot decide on a verdict, the judge declares a hung jury and rules amistrial. The prosecution must then decide whether to drop the charges or retry thecase.

O. If the verdict is guilty, the judge sets a court date for sentencing. Sometimes the juryrecommends a sentence. More often, the judge decides the sentence. Sentences oftenspecify prison time, but may include fines or community service work.

P. The defense often appeals a guilty verdict. The Fifth Amendment prohibition againstdouble jeopardy bars the prosecution from appealing a not-guilty verdict.

Discussion QuestionWhat do judges consider in deciding on a sentence? (Judges consider the defendant’sfamily situation, previous criminal record, employment status, and other information. Judgesmay also consider statements from the victims.)

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I. Causes of Juvenile Delinquency (page 375)

A. In most states, anyone under age 18 is considered a juvenile—not yet legally anadult. Our system treats young people who commit crimes—called juvenile delinquents—somewhat differently from adults. Older juveniles charged with serious crimes, though, may be tried as adults.

B. Factors such as abuse, neglect, emotional or mental problems, and poverty contributeto juvenile delinquency. However, many children with these risk factors never havetrouble with the law, while children from all backgrounds can become delinquents.

Discussion QuestionWhat are some risk factors for juvenile delinquency? (Risk factors include abuse, neglect, and emotional or mental problems. Also, children who grow up in poverty, in over-crowded and rundown neighborhoods where drug and alcohol abuse are common, are atgreater risk.)

II. Stages in the Juvenile Justice System (pages 376–378)

A. The main goal of juvenile courts is to try to rehabilitate, or correct a person’s behavior, rather than punish.

B. Cases begin with arrest or petitions to the courts filed by school administrators, storemanagers, or others. Parents may also petition. This means that children can be putinto the juvenile justice system without having been accused of a crime.

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Young People and the Courts (pages 375–378)

Did You Know? Many communities are experimenting withprograms to help young people at risk stay out of trouble andimprove their lives. One such program is midnight basketball.Communities organize leagues that play between the high-crimehours of 10 P.M. and 2 A.M. These leagues offer a safe alternativeto hanging out on the street. Most programs also include educa-tional and life-skills activities. In addition to basketball, the“Night Basketball and Books” program in California offers helpwith reading and math skills, art and dance activities, field trips,and a hearty meal.

C. Before reforms in the late 1800s, juvenile offenders received the same sentences andwere sent to the same prisons as adults. Today, juvenile courts try to do whatever isbest for the young person.

D. In cases of neglect or abuse by caregivers, a court may place youths in foster homes.Delinquency cases involve crimes. Other cases involve actions that are considered illegal only for juveniles, such as running away or curfew violation.

E. When a juvenile is arrested, police notify the parents or caregivers. The child may be sent home or placed in juvenile detention until time to appear in court.

F. In nonviolent cases, juveniles may be diverted away from court and into special programs, such as counseling, job training, or drug treatment.

G. A judge may hold a detention hearing to determine whether the juveniles might be dangerous to themselves or others. If so, they may remain confined.

H. The next stage is a preliminary hearing to determine probable cause.

I. The trial is less formal than in adult court. Only the parties involved may attend. Bothsides call and cross-examine witnesses. There is no jury. The judge decides whetherthe young person is delinquent or nondelinquent.

J. The system tries to protect juveniles by keeping their identities and criminal recordssecret. In some cases, records may be erased when the offender becomes an adult.

K. Some states are experimenting with peer juries for the sentencing stage, if the defen-dant agrees.

L. If a juvenile has been found delinquent, the court holds a hearing to decide the dispo-sition, or sentencing. Delinquents may be sent home with a stern lecture or placed ina special training school, reformatory, treatment center, or teen shelter.

M. If the young people attend school and obey their caregivers during the probationaryperiod, the charges will be removed from their record. Juveniles who were neglectedmay become wards of the court until they are adults. Judges may place juveniles withserious mental or emotional problems in a hospital or institution.

Discussion QuestionCan a young person be put into the juvenile justice system without being accusedof a crime? Explain. (Yes. Parents who cannot control the behavior of their children maypetition a court for help. This means that children can be put in the system for behavior likerepeatedly running away from home, which is not a crime.)

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III. Supreme Court Rules (page 378)

A. Gerald Gault, age 15, had been sentenced to six years in a reformatory for makingindecent telephone calls to a neighbor. His parents were not informed of his arrest. He had no attorney present and the neighbor was never questioned.

B. The Supreme Court overturned the ruling in the 1967 case In re Gault and establishedrules for juvenile criminal cases. Juveniles have the right to counsel, the right to con-front witnesses, and the right not to be forced to incriminate themselves.

Discussion QuestionWhat rights do adults have in a criminal case that were not given to Gerald Gaultin his trial? (Gault did not have an attorney present during questioning and was not giventhe chance to question the neighbor who accused him.)

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Civic Participation (pages 384–387)

Did You Know? The federal as well as many state and localgovernments maintain Web sites specially designed for young visitors. The Federal Consumer Information Center offers FirstGovfor Kids at www.kids.gov. Here, young people can follow links toother kids’ sites to explore topics such as government, careers,money, and the environment. At Tax Interactive (www.irs.ustreas.gov/taxi), the Internal Revenue Service presents the principles oftaxation from a young person’s perspective.

I. A Tool for Political Education and Action (pages 384–386)

A. The Internet is a mass communication system of millions of networked computersand databases all over the world. The World Wide Web allows users to interact withthe billions of documents stored on computers across the Net. Web sites are “pages”on the Web that contain text, images, audio, and video.

B. You can find information on almost every topic on the Web. Not everything on theInternet is accurate. Before believing, evaluate the credibility of the source.

C. Most national newspapers and newsmagazines publish online every day and keeparchives, or files of older stories. Your hometown newspaper may have a Web site aswell. Television and radio station sites offer audio and video as well as written news.

D. The sites of research and educational institutes present their findings on current topicsand make policy recommendations. Be aware that not all “think tanks” are nonparti-san (free from political ties).

E. Governments at all levels have their own Web sites. Hundreds of sites exist forbranches and agencies of the federal government and resources like the SmithsonianInstitute museums.

F. E-government is making it easier to learn about public policy and participate in government directly. Government sites help people do everything from obtaining a marriage license to commenting on the performances of officials.

G. The Internet can help you find special-interest groups with values similar to yourown. Newsgroups, or Internet discussion forums, offer a way to exchange ideas with people who share your concerns.

Discussion QuestionHow is e-government making it easier for citizens to get involved in their govern-ment? (At government Web sites, citizens can learn about public policy, check on electedofficials, request services, and participate in government directly. These sites help citizens stayinformed as well as interact with their government.)

II. Election Campaigns (pages 386–387)

A. The Internet is changing how citizens can participate and candidates run for office.

B. Both major parties and many minor parties maintain Web sites. Nearly every candi-date for higher office has a site. Visitors can learn the candidate’s background, positionon issues, recent speeches, and more. Many such sites offer an electronic newsletterthat updates subscribers by e-mail.

C. Remember that the goal of party and candidate sites is to build support for their ideasand candidates, not to explain both sides of an issue. They have links only to otherlike-minded sites.

D. Few voters have a chance to meet the candidates, but e-mail provides a way fordirect, personal contact with candidates or their staff.

E. During the 2000 presidential campaign, citizens participated by setting up indepen-dent Web sites to support their candidates.

F. Grassroots Web sites raise some concerns for parties and candidates. The sites maycontain misinformation or have links to extremist groups that a candidate does notwant to be associated with. Also, it can be hard to tell official from unofficial sites.

Discussion QuestionIn what ways might the Internet be “the best campaign tool since the phone andthe television”? (Parties and candidates can use Web sites to inform voters about theiractivities, positions on issues, candidates’ backgrounds, schedule of appearances, and more.They can use their sites to gather the views of the voters and use e-mailed newsletters to stayin touch with voters. They can also provide links to other sites that support their views. Plus,individual supporters may create their own Web sites to promote their favorite candidates.)

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I. Divisions in Society (pages 389–390)

A. Many people thought the Internet would promote the spread of democratic ideas andundermine authoritarian regimes—governments in which one leader or group holdsabsolute power. But authoritarian governments are limiting online political communi-cation by building electronic borders similar to “firewalls” that protect businessnetworks from intruders.

B. The Chinese government controls access to Web sites of human rights groups and for-eign newspapers. It watches the messages Chinese users post. It has shut down Websites of some dissident groups—groups who disagree with the established political orreligious system.

C. In the United States, some people fear the Internet is widening the gap between the“haves” and “have-nots” and empowering intolerant extremist groups. Another con-cern is that the Internet leaves citizens vulnerable to invasions of privacy.

D. Access to the Internet is becoming a necessity, yet a major study shows that wealthyfamilies are far more likely to have Internet access than are low-income families.

E. Schools and public libraries are helping to close the technology gap. Business andpolitical leaders are also looking into ways to provide training and Internet access.

F. The Internet also gives hate and extremist groups a way to ban together and spreadtheir ideas and propaganda—misleading messages designed to manipulate people.

Discussion QuestionWhy is the ability to use the Internet becoming a necessity in today’s world?(People without access to the Internet risk being shut out of a key method for gathering information, participating in civic life, and making money.)

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Challenges for Democracy (pages 389–393)

Did You Know? Legitimate businesses that sell productsonline will always provide a secure page for entering your creditcard number and the other personal information required to placeyour order. A “secure” page is one that encrypts, or codes, theinformation before sending it on to the site operator. Usually yourbrowser will notify you when you are entering a secure page.Also, most browsers display a closed-lock icon in the corner ofthe screen when you enter a secure page.

II. Threats to Privacy (pages 391–393)

A. Law enforcement is working to fight cybercrimes such as fraud, identity theft, andchild pornography. While most people see the need for some government surveillanceof the Internet, controversy surrounds the potential threat to privacy.

B. The FBI developed a wiretapping technology for the Internet called “Carnivore.” It is meant for use only in criminal investigations when authorized by a court.

C. Carnivore can watch for particular words and phrases in messages. It can recordaddresses when a suspect sends or receives an e-mail.

D. As Carnivore monitors, however, it captures not only a suspect’s messages but alsothose of bystanders. A member of Congress voiced concern that Carnivore may violate the Fourth Amendment’s protection against unwarranted searches.

E. Some employers keep tabs on how their workers use the Internet on company time.

F. Criminals can intercept people’s files and e-mail unless they are encrypted.

G. Most Web sites gather information about visitors. If you register at a site, you mayhave to provide your name, e-mail address, home address and phone, and credit cardnumber.

H. Sites can also collect data about you without your knowledge. The site may track thepages you visit, the links you click, and the terms you search for. Before long, thebusiness may have built a personal profile that includes your age, reading preferences,shopping tastes, favorite travel spots, and other details.

I. Site operators may sell your information, resulting in a lot of unwanted junk mail.Information you wanted to keep private might be passed on.

J. The Children’s Online Privacy Protection Act requires Web site companies to establisha privacy policy describing the information they collect from children and how theywill use it. The companies need parents’ permission to gather information from chil-dren under age 13.

Discussion QuestionHow can Web sites gather information about you? (Sites can ask you for informationsuch as your name, address, and phone number when you register or join something at thesite. If you buy online, you will have to provide your credit card number. Sites can also gatherinformation without your knowledge. By tracking your movements and search terms, siteoperators can build a personal profile that includes your age, reading preferences, shoppingtastes, and other details.)

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I. Internet Speech (pages 395–396)

A. Free speech is a key democratic right. The Internet promotes free speech by giving all users a way to express their views to the world. Unfortunately, hate groups andothers also use the Internet to spread offensive material.

B. The Communications Decency Act outlawed sending or displaying indecent orobscene material over the Internet “in a manner available” to those under 18. In Renov. American Civil Liberties Union, the Supreme Court ruled the indecency portion of thelaw unconstitutional. The Court held that speech on the Internet should receive thesame high level of protection as given to books and newspapers.

C. In Hazelwood School District v. Kuhlmeier, the Supreme Court ruled that school adminis-trators can regulate the content of student print publications if doing so serves aneducational purpose. Several lower courts have found that students’ online papers produced with school equipment may also be subject to regulation.

Discussion QuestionHow does the Internet promote free speech? (The Internet gives anyone with a computerthe chance to circulate his or her views across the world. Unfortunately, free speech on theInternet also enables hate groups and others to spread offensive material.)

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Regulating the Internet (pages 395–399)

Did You Know? The Internet is presenting some knottyproblems for the courts as they try to apply old laws to this newmedium. In one case, the recording industry sued a Web sitecalled Napster. Napster enabled its users to swap music files witheach other for free over the Internet. Record companies and musi-cians received no payment for this use of their music. In March2002, a federal appeals court upheld a lower court’s ruling thatNapster may not continue its free service. The band Metallicareacted to the ruling: “We are delighted that the Court has upheldthe rights of all artists to protect and control their creative efforts.The 9th Circuit Court has confirmed that musicians . . . andother members of the creative community are entitled to thesame copyright protections online that they have traditionallybeen afforded offline.”

II. Intellectual Property (pages 396–397)

A. Intellectual property is something people create, such as songs, movies, books,poetry, art, and software. When you buy a book or music CD, you do not gain owner-ship of the artistic work. Only the artist or author who created the work has a right tosell it or let others use it.

B. A copyright is the owner’s exclusive right to control, publish, and sell an originalwork. It is intended to prevent people from taking or copying someone else’s creationwithout permission.

C. Computers and the Internet make it easy to copy and widely distribute intellectualproperty. As a result, the Internet has become a battleground over intellectual proper-ty rights.

D. The Napster Web site enabled users to swap files of copyrighted songs for free. Themusic industry sued Napster for violating copyrights. Court rulings forced Napster toshut down. Meanwhile, other swap sites appeared. The battle will continue.

E. The Digital Millennium Copyright Act makes it a crime to develop or spread softwarethat will bypass computer codes that protect copyrighted material.

F. Movie and recording companies believe the law helps protect what is theirs. Criticssay the law will punish computer scientists for exposing flaws in computer securitysystems, even if they don’t steal anything. Also, civil liberties groups argue that soft-ware code is a form of speech protected by the First Amendment.

Discussion QuestionHow is loaning your jacket to a friend different from swapping music files over the Internet? (Your jacket is your property. You are free to do whatever you want with it.Music, however, is intellectual property protected by copyright. When you buy a CD, you donot gain ownership rights to the artistic product. Only the artist who created the work hasthe right to sell it or let others use it.)

III. Taxing E-Commerce (page 398)

A. Online shopping allows customers to avoid paying sales tax. As a result, state andlocal governments lose out on a prime source of revenue. Revenue is the incomethat a government or business collects.

B. Tax opponents argue that sales taxes would unfairly burden online companies. Taxes vary from state to state. Online businesses would have to charge different rates depending on where customers lived and then send the funds to different state governments. Plus, unlike local merchants, online companies would not share the benefits those taxes pay for.

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C. An advisory group created by Congress proposed that state and local tax systems be simplified and made more uniform. Then a fair Internet tax could be developed.

Discussion QuestionWhy do you think traditional retail stores favor taxing online purchases?(Traditional retailers that do not operate online lose business if you shop online instead of atyour local mall. Also, without sales tax, products online may be less expensive than compet-ing products in traditional stores. On the other hand, the cost of mailing online purchasesmay offset the price difference.)

IV. The Internet at School (pages 398–399)

A. The Children’s Internet Protection Act requires schools to install technology thatblocks student access to offensive or dangerous materials on the Web.

B. The software allows school officials to decide what material is harmful. It also moni-tors the school’s Internet traffic to identify prohibited activities.

C. Should parents be able to look at school records of Web sites that students have visited? In a court case, school officials argued that releasing the records would violate student privacy. The court ruled that a parent could look at the records as long as administrators removed information that identified individual students.

Discussion QuestionWhy might parents want to look at school records of Internet use? (Parents mightwant to make sure their children were not visiting inappropriate or dangerous sites or usingthe Internet for prohibited activities, such as drug dealing.)

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I. Economic Choices (pages 406–408)

A. Economics is the study of how we make decisions in a world where resources are limited. It is sometimes called the science of decision making.

B. Needs are things we need for survival, such as food, clothing, and shelter. Wants arethings we would like to have.

C. The fundamental economic problem is scarcity—we do not have enough resources to produce all the things we would like to have. Because of scarcity, we must makechoices among alternatives.

D. Society must decide what to produce with its limited resources. For example, societymay have to choose whether to produce goods for defense or services for poor people.

E. Society must decide how to produce. For example, should we accept more pollutionfrom factories in exchange for greater output of products?

F. Society must decide for whom to produce. Who will receive the goods and services? Inthe United States, most goods and services are distributed through the price system.

Discussion QuestionWhat are the three basic economic questions that a society must answer? (The threebasic economic questions are what to produce, how to produce, and for whom to produce.)

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The Fundamental Economic Problem (pages 406–409)

Did You Know? Scarcity may have played a key role in thefall of the Soviet Union. In the 1980s, the United States and theSoviet Union were locked in an arms race. Each was trying tobuild more and better weapons than the other. As both countriesspent more on weapons, they had less to spend on consumergoods. The Soviet command economy was less efficient than theU.S. economy. As a result, the number of goods available to con-sumers declined more drastically there. The resulting decline instandard of living became unacceptable to many Russians andcontributed to the eventual overthrow of the communist government.

II. Using Economic Models (pages 408–409)

A. The economy includes all the activity in a nation that together affects the production,distribution, and use of goods and services.

B. To study a part of the economy, economists use economic models. These are simplified representations of the real world, based on economic theories. Business and government often base decisions on solutions that emerge from testing economicmodels.

C. Models are based on assumptions. The quality of the model’s results can be no betterthan the assumptions on which it is based.

D. Economists use models to better understand the past or present and to predict thefuture. If predictions based on a model turn out to be wrong, economists revise themodel.

Discussion QuestionWhy do economists use economic models? (Economists use models to study a specificpart of the economy, such as rising unemployment. They use models to better understand thepast or present and to predict the future. Businesses and governments make actual decisionsbased on the solutions that emerge from testing economic models.)

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I. Trade-Offs (pages 410–413)

A. Economic decision making requires that we take into account all the costs and all thebenefits of an action.

B. Economic choices involve trade-offs, or exchanging one thing for the use of another.For example, when you buy a product, you exchange money for the right to ownthat product rather than something else you could buy for the same price.

C. People, businesses, and societies make trade-offs every time they choose to use theirresources in one way and not in another. More money for education may mean lessmoney to spend on medical research or national defense.

D. Opportunity cost is what you cannot buy or do when you choose to do or buy onething rather than another. It is the next best alternative that you had to give up forthe choice you made.

E. Opportunity cost includes more than just money. It also includes the discomforts andinconveniences linked to the choice made. For example, the opportunity cost ofcleaning the house includes not only the price of cleaning products, but also the timeyou spent cleaning instead of doing something else, like listening to music.

F. All businesses have fixed and variable costs. Fixed costs are expenses that are thesame no matter how many units of a good are produced. Variable costs are expensesthat change with the number of products produced. If a business produces more, vari-able costs like raw material and wages will increase.

G. Fixed costs plus variable costs equal total costs. To find average total cost, divide totalcost by the quantity produced.

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Making Economic Decisions (pages 410–414)

Did You Know? A credit card may seem like extra spendingmoney. But before you use your card, you should think about thetotal costs. When you buy on credit, you are giving up some abili-ty to buy in the future. Say you bought something today for $500on credit. The total cost of this purchase includes the $500 plusthe interest you must pay on the debt. It also includes the inter-est you would have earned on the money if you had put it into asavings account. Therefore, the future purchasing power you gaveup is greater than the $500 you spent today.

H. Marginal cost is the extra cost of producing one additional unit of output. If it costsan extra $50 to produce one more bicycle helmet, the marginal cost is $50.

I. Businesses measure total revenue and marginal revenue to decide what amount of output will produce the greatest profits.

J. Total revenue equals the number of units sold times the average price per unit.Marginal revenue is the change in total revenue that results from selling one moreunit of output.

K. We usually do something because we expect to achieve some benefit. Marginal benefit is the additional benefit associated with an action.

Discussion QuestionSuppose you chose to study for a test. If you did not have a test the next day, youwould have played basketball with friends. What is the opportunity cost of yourdecision? Explain. (Opportunity cost is the cost—in money, time, inconvenience, etc.—of thenext best alternative given up for the choice made. Because playing basketball was the optionyou would have chosen next, it is the opportunity cost of the decision to study.)

II. Cost-Benefit Analysis (pages 413–414)

A. Cost-benefit analysis is an economic model used to compare marginal costs andmarginal benefits of a decision. You should choose an action when the benefits aregreater than the costs. If costs outweigh benefits, you should reject the option.

B. Suppose you are a farmer trying to decide how many acres to plant. The graph onpage 413 shows a cost-benefit analysis for this decision. You will plant the most pro-ductive land first. The extra benefits decline as you plant less productive land. Thegraph shows that after 15 acres, the extra costs outweigh the extra benefits of plant-ing more acres. The result of this analysis tells you to plant no more than 15 acres.

C. You could do a similar analysis to determine what to produce. For example, you couldcompare the results of planting crops other than wheat. The crop that produces thegreatest marginal benefit is the one you should plant.

D. You could use this method to decide for whom to produce. You could compare thecosts and benefits of selling your wheat nearby or 100 miles away. You would chooseto distribute your product wherever the marginal benefit was greatest.

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Discussion QuestionSuppose you have done a cost-benefit analysis to decide how many lawns to mowto earn money during the summer. How can you tell from the graph how manylawns to mow? (You should mow only the number of lawns up to the point where marginalbenefits equal marginal costs. For any additional lawns you mow after that point, the extracosts outweigh the extra benefits.)

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I. Understanding Your Role in the Economy (pages 416–418)

A. The United States has a market economy. Most economic decisions are not made by the government, but by individuals looking out for their own and their families’self-interests.

B. A market economy is participatory. The choices you make as a consumer affect theproducts that businesses make and the prices they receive for their products.Likewise, the products offered and their prices affect the choices you make.

C. A market economy is based on capitalism, a system in which citizens own most ofthe means of production. It is also based on free enterprise—businesses compete forprofit with a minimum of government interference.

D. Keeping informed means reading news stories, listening to news reports, and gather-ing information about economic activities of businesses and government.

E. Incentives are rewards offered to try to persuade people to take certain economicactions. Price is one incentive. Others are bonuses for salespeople and low credit ratesfor consumers. Knowing how incentives work will help you make wise choices.

F. One role of government in the economy is to help maintain competitive markets.Another role is to provide services, such as education and national defense, that theprivate sector does not provide.

G. Competition forces businesses to use society’s resources efficiently to produce goodsand services people prefer and to produce quality products at low costs. Low produc-tion costs keep prices low for consumers.

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Being an Economically Smart Citizen (pages 416–419)

Did You Know? Stores use many price tactics as incentivesto encourage consumers to buy. Most, such as sale prices, rebates,and coupons, are legitimate. However, watch out for “bait-and-switch.” The store tries to lure you in with a very low advertisedprice. This is the “bait price.” When you arrive, the salespersontells you the item has been sold, but you can get a great deal on another (more expensive) model. This is the “switch.” TheFederal Trade Commission considers bait-and-switch a deceptivepractice and has banned its use. However, enforcement has beenlax, so the practice still occurs occasionally.

H. Government can use incentives to encourage people and businesses to take certainactions. For example, offering scholarships encourages more people to get higher education.

I. Government can also discourage certain actions. For example, tax laws can punishcompanies that cause pollution.

Discussion QuestionFumes from motor vehicles contribute to air pollution. What could the govern-ment do to encourage actions that would reduce this source of pollution?(Government could increase the tax on gasoline. It could impose an extra tax on “gas-guzzling”vehicles. It could make laws that require carmakers to produce more fuel-efficient cars. Thefederal or state government could withhold funding from local governments where air pollu-tion exceeds an acceptable standard. This would encourage the local governments to findways to encourage people to drive less, such as by improving the public transportation systemor adding carpool lanes.)

II. Making Wise Choices (pages 418–419)

A. Rational choice is choosing the alternative that has the greatest value from amongcomparable-quality products. You make a rational choice when you buy the goodsand services that you believe will best satisfy your wants for the lowest possible cost.

B. Wise consumers will not all make the same choices. A rational choice is one that gen-erates the greatest perceived value for any given expenditure.

C. Wise decision making by individuals also benefits society by making the best use ofscarce resources.

D. Being fully informed is the best way to make the best economic as well as politicaldecisions.

Discussion QuestionHow is good consumer decision making similar to good political decision making?(To make the best possible choices when you vote, you must be informed about candidatesand issues. The same is true when you cast your dollar “votes” for goods and services. Beingfully informed is the best way to make the best choices.)

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I. Producing Goods and Services (pages 424–426)

A. Economic output includes goods, or tangible products, and services—work performed for someone else.

B. Four factors of production are needed to produce goods and services: naturalresources, labor, capital, and entrepreneurs.

C. Natural resources are all the gifts of nature that make production possible, such as land, rain, forests, and minerals.

D. Labor is the nation’s workforce or human resources. It includes the physical andmental talents of the people who help produce goods and services. Factors such aspopulation growth, education, and war affect the quantity and quality of labor.

E. Capital, or capital goods, includes the tools, machinery, and buildings used to makeother products. Capital goods are unique because they are themselves produced.Consumer goods satisfy wants directly; capital goods do so indirectly by aiding production of consumer goods.

F. Entrepreneurs are individuals who start new businesses, introduce new products,and improve management techniques. They are innovative and willing to take risks.They drive the economy because they use factors of production to produce new products.

Discussion QuestionHow are capital goods different from consumer goods? (Consumer goods are thingslike clothes, clocks, shoes, and foods that satisfy wants directly. Capital goods satisfy wantsindirectly. They are the tools, machinery, and buildings used to produce consumer goods.)

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Economic Resources (pages 424–427)

Did You Know? For many years, the United States has hadthe highest Gross Domestic Product of any country. That is, thetotal value of all the goods and services we produce is the high-est in the world. However, we no longer have the highest GDPper person. That achievement belongs to the productive littlecountry of Luxembourg. We also no longer have the fastest grow-ing economy in the world. The economies of countries such asChina, Thailand, South Korea, and India have been growingfaster.

II. Gross Domestic Product (pages 426–427)

A. Gross Domestic Product (GDP) is a measure of the size of the economy. It is thetotal value, in dollars, of all final goods and services produced in the country during a single year. Final goods are goods sold to their users.

B. GDP does not count intermediate goods, which are components of final goods. It alsodoes not count the sale of used goods, which do not represent new production.

C. GDP is expressed in terms of money. This enables us to compare the relative worth of goods and services, which is more meaningful than simply numbers of products.

D. To compute GDP, identify all goods and services produced and their average prices.Multiply the number produced of each item by its average price. Then add up everything.

E. If the new GDP is higher than the previous one, then the economy is expanding. If itis lower, the economy is declining. Economists study GDP figures regularly to analyzebusiness cycle patterns.

F. Standard of living is the quality of life based on the possession of necessities andluxuries that make life easier. When GDP grows faster than the population, there aremore goods and services, on average, for us to enjoy.

G. GDP does not measure society’s overall well-being. Other things—such as a reductionin crime and drug abuse and greater equality of opportunity—can make a countrybetter off without raising GDP.

H. Failure to account for improvements in product quality is a shortcoming of GDP.Greater production of goods and services is only one of many factors that raise thestandard of living.

Discussion QuestionWhat are some limitations of GDP as a measurement? (GDP does not measure society’soverall well-being. Many things could make a country better off without necessarily raisingGDP, such as a reduction of crime, greater equality of opportunity, and reduction of drug andalcohol abuse. Also, GDP does not reflect improvements in quality of products. GDP is onlyone of many factors that contribute to raising the standard of living.)

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I. Circular Flow of Economic Activity (pages 428–430)

A. A market is a location or other situation that allows buyers and sellers to exchange a certain economic product. Markets can be local, regional, national, or global.

B. The economic decision makers are the consumer, business, government, and foreignsectors. A circular flow of economic activity—resources, goods and services, andmoney—takes place among these groups.

C. Consumers earn their income in factor markets, where productive resources arebought and sold. Workers sell their labor for income. People who own land loan it in return for rent. People who own capital exchange it for interest.

D. People spend their income in product markets, where producers offer goods andservices for sale. Businesses receive payments for their products from consumers.They spend this income on natural resources, labor, and capital to make more products.

E. The business sector buys capital goods in the product markets to use in production.

F. The government sector buys productive inputs in the factor markets to use in creatingits goods and services. While government receives some revenue from selling its serv-ices, most of its revenue comes from taxes. It also uses its revenue to buy final goodsand services in the product markets.

G. The foreign sector includes all the countries in the world. The United States buys fromand sells to other countries.

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Economic Activity and Productivity (pages 428–432)

Did You Know? Vast deposits of oil lie under the PersianGulf nations of Qatar, Kuwait, and Bahrain. They have built pros-perous economies by specializing in oil production. However,because their economies are so dependent on oil, their nationalincomes can rise and fall steeply with changes in world oil prices.Also, the oil will run out some day. Their governments are encour-aging the growth of other industries to develop more variedeconomies.

Discussion QuestionWhat kinds of products does the business sector buy in product markets? Why?(The business sector purchases primarily capital goods for use in producing more goods andservices. These purchases include things such as tools, equipment, and factories.)

II. Productivity and Economic Growth (pages 430–432)

A. When a nation’s total output increases over time, the economy grows. This means the circular flow becomes larger.

B. Productivity is a measure of the amount of output produced by a given amount ofinputs in a specific period of time. It reflects how efficiently resources are being used.

C. Specialization can improve productivity. People, businesses, and countries concen-trate on the goods or services they can produce better than anyone else. We specializebecause we earn more by doing the things we do well. It is also more efficient to specialize than to do everything for ourselves.

D. Division of labor is the breaking down of a job into separate, smaller tasks per-formed by different workers. It is a form of specialization, making use of differences in skills.

E. Human capital is the sum of all the skills, abilities, and motivation of people. Whenbusinesses invest in things like training and employee health care, worker productivi-ty tends to increase.

F. Because of specialization, the American economy displays a high degree of economicinterdependence. We rely on others, and others rely on us, to provide the goodsand services we consume. As a result, events in one part of the world can have aneconomic impact on other parts of the world.

Discussion QuestionWhen does productivity go up? (Productivity goes up whenever more output can be pro-duced with the same amount of inputs in the same amount of time. It also goes up when thesame output can be produced with less input.)

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I. Features of Capitalism (pages 434–436)

A. The U.S. economy is built on capitalism and free enterprise. Capitalism is an eco-nomic system in which private citizens own and use the factors of production to seeka profit. Free enterprise is an economy in which competition is allowed to flourishwith a minimum of government interference.

B. Markets are places where different sectors of the economy interact, and theirexchanges determine the prices of goods and services.

C. Businesses try to produce the products people want most. Because of this, we use the term consumer sovereignty to describe the consumer as ruler of the market,the one who determines what products will be produced.

D. Choice is a key element for free enterprise. We are free to choose the occupation we want and where we want to work. We can choose the products we will buy.Businesses can choose the products they will produce and offer for sale.

E. Along with the freedom to choose comes the responsibility to accept the conse-quences of the decisions. If an entrepreneur starts a business that fails, thegovernment usually won’t help out.

F. Under capitalism, we also have private property rights. We are free to own anduse, or dispose of, our own property as we choose as long as we do not interfere withthe rights of others. These rights give us the incentive to work, save, and invest.

G. Capitalism thrives on competition—the struggle between buyers and sellers to getthe best products at the lowest prices. Competition between sellers tends to reduceproduction costs and increase product quality.

H. Competition rewards the most efficient producers and forces the least efficient out of business. Competition results in efficient production, higher-quality products, andmore satisfied customers.

I. Profit is the money left over after all costs of production have been paid. The profit motive is the driving force behind free enterprise and capitalism. People are willing to invest in a business venture and risk losing their investment for thechance to earn a profit.

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Capitalism and Free Enterprise (pages 434–437)

Did You Know? Markets are not necessarily physical places.Sometimes buyers and sellers get together electronically. A stockmarket is a market where investors buy and sell shares of stock,or shares of ownership in corporations. In the “over-the-counter”stock market, investors use an electronic service called NASDAQto buy and sell stocks with other investors. They may never meetface-to-face.

J. Voluntary exchange is the act of buyers and sellers freely and willingly engaging inmarket transactions. As long as exchanges are voluntary, both buyer and seller mustfeel that they benefit from their exchange, or they will not do it.

Discussion QuestionIn what way does the profit motive involve risk? (Under free enterprise and capitalism,people are free to risk their wealth in a business venture. If the venture goes well, the peoplewill earn a profit reward. If things go poorly, they could lose part or all of their investment.The chance of loss is the risk investors take in hopes of earning a profit.)

II. The Spread of Capitalism (pages 436–437)

A. Capitalism developed gradually over hundreds of years. Two concepts underlie themarket system: people can work for economic gain and government should have avery limited role in the economy.

B. Trade routes opened between Europe and the East in the 1200s. As trade increased,people began to invest money to make profits. By the 1700s, Europe had a new atti-tude about work and wealth. It included the ideas of progress, invention, and freemarkets in which buyers and sellers could make unlimited economic decisions.

C. In his book The Wealth of Nations, Scottish economist Adam Smith scientificallydescribed the basic principles of economics for the first time. Smith believed that individuals, in seeking profit, end up benefiting society as a whole.

D. From the writings of Smith and others came the idea of laissez-faire, meaning “to letalone.” According to this philosophy, government should not interfere in the market-place. Government’s role is to ensure free competition. Many American Founderswere influenced by Smith’s book.

E. Communism and capitalism have been viewed as opposing political and economicstructures. The collapse of communism, however, did not mean a smooth transition to capitalism.

Discussion QuestionIn laissez-faire economics, what is the role of government? (The government’s role isstrictly limited to those few actions needed to ensure free competition in the marketplace.)

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I. Consumer Rights and Responsibilities (pages 438–440)

A. Consumers have rights and responsibilities in our free enterprise system.

B. Consumerism is a movement to educate buyers about the purchases they make and to demand better and safer products from manufacturers.

C. Many laws protect consumer rights. The Fair Packaging and Labeling Act requiresevery package to have a label identifying its contents and how much it weighs. ThePure Food and Drug Act requires manufacturers of foods, cosmetics, and drugs toprove their products are safe.

D. The Better Business Bureau is one of many groups formed to protect consumers.Businesspeople run the local bureaus. They provide information about local businesses, warn of dishonest practices, and investigate consumer complaints.

E. President John F. Kennedy, and later President Richard Nixon, emphasized five rightsknown as the Consumer Bill of Rights. Consumers have the right to a safe product, to be informed, to choose, to be heard, and to redress.

F. With consumer rights come responsibilities. If a product or service is faulty, you areresponsible for starting the problem-solving process. State the problem and suggest a fair solution. Keep an accurate record of your efforts to solve the problem. If neces-sary, contact the manufacturer in writing and keep a copy.

G. A warranty is a promise made by a manufacturer or seller to repair or replace aproduct within a certain time if it is faulty.

H. Consumers are also responsible for exhibiting ethical behavior by respecting therights of producers and sellers.

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The Economy and You (pages 438–442)

Did You Know? In 2001, after years of public debate, theHouse and Senate approved different versions of a Patients’ Billof Rights. Both would ensure patients access to emergency roomsand specialists, among other protections. The two bills differ,though, in the ability of patients to hold their health maintenanceorganization accountable for its decisions concerning their healthcare. The House bill would allow patients to sue their HMOs butwould limit the amount of damages they could collect. TheSenate version favors patients more in court cases. The Senateand House continue to work out their differences in conference.

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Discussion QuestionWhat is the consumer right to redress? (Consumers have a right to obtain from manu-facturers adequate payment if their product causes financial or physical damage.)

II. Your Role as a Consumer (pages 440–442)

A. Disposable income is money a person has left after all the taxes on it have beenpaid. People generally use it first to buy necessities, such as food and housing.Discretionary income is money left over after paying for necessities that can be used for satisfying wants, including luxury items and savings accounts.

B. Virtually all the steps in the consumer decision-making process involve an opportuni-ty cost. Consumers must decide if a purchase is worth the next best option theywould have to give up.

C. Consider your goals when you make a buying decision. Buying things now will makelong-term financial goals harder to accomplish.

D. Saving is setting aside income for use later. It is the part of your income that youdon’t spend.

E. Saving enables people to make major purchases, such as a car or a house. Saving alsocomes in handy in emergencies.

F. Saving by individuals benefits the economy as a whole. Saving provides money forothers to invest or spend. Saving also allows businesses to expand.

G. To save regularly, workers can have their employers withhold a fixed amount fromtheir paychecks and deposit it automatically into their savings accounts. Or, peoplemay do it themselves by saving a specific amount each week or month.

H. Interest is the payment people receive when they lend money, or allow someoneelse to use their money. Money saved in a bank earns interest at periodic intervals for as long as funds are in the account.

I. Saving is a trade-off. You decide to spend less today to increase your ability to spendin the future.

J. To decide how much to save, you need a plan. Your plan would consider your every-day expenses, reasons for saving, interest you could earn, and your potential to earn a higher income in the future.

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Discussion QuestionHow does saving by individuals benefit the economy as a whole? (Saving providesmoney for others to invest or spend. Saving also allows businesses to expand, which providesincreased income for consumers and raises the standard of living.)

I. An Introduction to Demand (pages 448–449)

A. In the United States, the forces of supply and demand work together to set prices.

B. Demand is the desire, willingness, and ability to buy a good or service. For demandto exist, a consumer must want a good or service, be willing to buy it, and have theresources to buy it.

C. A demand schedule is a table that lists the various quantities of a product or servicethat someone is willing to buy over a range of possible prices.

D. A demand schedule can be shown as points on a graph. The graph lists prices on thevertical axis and quantities on the horizontal axis. Each point on the graph showshow many units of the product or service an individual will buy at a particular price.The demand curve is the line that connects these points.

E. The demand curve slopes downward. This shows that people are normally willing to buy less of a product at a high price and more at a low price. According to the law of demand, quantity demanded and price move in opposite directions.

Discussion QuestionSuppose the price of a movie ticket rises by $2. What does the law of demand predict will happen? Explain. (The law of demand says that price and quantity demandedmove in opposite directions. Therefore, when the price of movie tickets rises, the law ofdemand predicts that people will buy fewer tickets.)

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What Is Demand? (pages 448–451)

Did You Know? In recent years, sport utility vehicles (SUVs)have become the hottest models in the auto industry. By 2001,SUV sales made up 22 percent of the market, with 58 modelchoices. In spite of their off-road design, many consumers seeSUVs as a good way to transport children to soccer practice andgroceries home from the store. As a result of the “utility” con-sumers find in sport utility vehicles, they are willing to pay topdollar for them.

II. Individual vs. Market Demand (pages 449–451)

A. Market demand is the total demand of all consumers for a product or service.Market demand can also be shown as a demand schedule and demand curve.

B. To illustrate, you would want to open a bicycle repair shop in an area with manybicycle riders and few repair shops. To measure demand in the area, you could checkprices at other similar shops and poll consumers about their reactions to the prices.

C. We buy products for their utility—the pleasure, usefulness, or satisfaction they giveus. The utility of a good or service is different for different people. A particular prod-uct may have no utility for some people.

D. Say you eat a slice of pizza. Because you are most hungry when you eat the first slice,this slice gives you the most utility, or satisfaction. As you grow less hungry, eachadditional slice you eat provides less marginal utility, or less additional satisfaction. Theprinciple of diminishing marginal utility says that our additional satisfaction tendsto go down as we consume more and more units.

E. To make a buying decision, we consider whether the satisfaction we expect to gain isworth the money we must give up. If the extra benefits (marginal utility) are greaterthan the marginal cost (extra money given up), we make the purchase. If not, wekeep the money instead.

F. Because marginal utility diminishes, we would be willing to pay less for the seconditem than for the first. Likewise, we would be willing to pay even less for the thirditem. This helps to explain the downward sloping demand curve.

Discussion QuestionSuppose you have watched two videos already today. What does the principle ofdiminishing marginal utility predict about your willingness to rent another videotoday? (The principle of diminishing marginal utility says that additional satisfaction tendsto go down as we consume more and more units. Because you have already viewed twovideos, the principle predicts that you would gain less satisfaction from renting another videothan you received from the first. Perhaps another activity would bring you greater satisfac-tion now than would a third video.)

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I. Changes in Demand (pages 452–455)

A. Market demand can change when more consumers enter the market; when incomes,tastes, and expectations change; and when prices of related goods change.

B. A graph of a market demand curve can show these changes. When demand goesdown, people are willing to buy fewer items at all possible prices. In this case, thecurve shifts to the left. When demand goes up, the curve shifts to the right. Peopleare willing to buy more of the item at any given price.

C. Demand is related to the number of consumers in the area. When more people moveinto an area, they buy more goods and services from local businesses. As a result, thedemand curve shifts to the right. When many people move away, demand for goodsand services in the area decreases. The demand curve shifts to the left.

D. The number of consumers in an area can change due to changes in birthrates, deathrates, immigration, or migration.

E. Income changes also affect demand. When the economy is healthy, people receiveraises or move to better-paying jobs. With more to spend, they are willing to buymore of a product at any particular price. In hard times, people lose their jobs. Withless income, they buy less, and demand goes down.

F. Consumers’ tastes change. When a product is popular, the demand curve shifts to theright. When its popularity fades, demand decreases, and the curve shifts to the left.

G. Expectations affect demand. If people believe hard times are on the way, they willbuy less. If people expect shortages of something, demand increases.

H. Competing products are called substitutes because consumers can use one in placeof the other. A change in the price of one good causes the demand for its substitute to move in the same direction.

I. Complements are products that are used together. The demand for one moves inthe opposite direction as the price of the other.

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Factors Affecting Demand (pages 452–456)

Did You Know? Sport utility vehicles (SUVs) consume a lotof gasoline. When gas prices rise, the cost of owning gas-guzzlerslike SUVs will rise. This increased cost may slow the demand forSUVs. Some experts are saying that a new hot trend has begun—toward crossover vehicles. Crossover vehicles blend features of an SUV with those of a car. The result is a smaller, more fuel-efficient vehicle.

Discussion QuestionIf the price of VCRs increases, what would you expect to happen to the demandfor videotapes? Explain. (VCRs and videotapes are complements. The demand for oneshould move in the opposite direction as the price of the other. Therefore, a rise in the price of VCRs will probably result in a drop in the number of videotapes demanded.)

II. Elasticity of Demand (pages 455–456)

A. When price rises, we know that quantity demanded will go down, but we don’t knowby how much. Demand elasticity is the extent to which a change in price causes achange in the quantity demanded for a product.

B. For some goods and services, demand is elastic. Each change in price causes a rela-tively larger percentage change in quantity demanded. That is, when the price of aproduct changes a little, the quantity demanded changes a lot.

C. Demand for a good or service tends to be elastic if it has an attractive substitute.Demand also tends to be elastic when the purchase can be postponed.

D. For other goods and services, demand is inelastic. Price changes have little effect onthe quantity demanded.

E. Demand for goods with few or no substitutes tends to be inelastic.

Discussion QuestionSuppose the price of electricity went up 25 percent. As a result, the quantity ofelectricity demanded dropped by 2 percent. Would you describe the demand forelectricity as elastic or inelastic? Explain. (The demand for electricity in this examplewould be inelastic. A relatively large increase in price resulted in a relatively small decreasein quantity demanded.)

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I. An Introduction to Supply (pages 462–464)

A. Supply refers to the various quantities of a good or service that producers are willingto sell at all possible market prices. Supply can refer to the output of one producer orto the total output of all producers in the market.

B. Producers offer different quantities of a product depending on the price that buyersare willing to pay.

C. Like quantity demanded, quantity supplied varies according to price, but in the opposite direction. As the price for a good rises, the quantity supplied rises and the quantity demanded falls. As the price falls, the quantity supplied falls and thequantity demanded rises.

D. The law of supply holds that producers will normally offer more for sale at higherprices and less at lower prices. Higher prices mean higher profit for producers. Higherprofits are an incentive to produce more.

E. A supply schedule is a table that shows the quantities producers are willing to supply at various prices. A supply schedule shown as a graph is a supply curve. Inthe graph, prices are listed on the vertical axis and quantities on the horizontal axis.

F. Unlike a demand curve, a supply curve normally slopes upward. This reflects the factthat suppliers are generally willing to offer more of a product at a higher price andless at a lower price.

G. Businesses provide goods and services hoping to make a profit. Profit is the money a business has left over after it covers its costs. Businesses try to sell at prices highenough to cover their costs with some profit left over. Profit is the primary goal forbusiness owners in our economy.

H. Producers can choose to use their profits to increase wages or hire new workers. They can invest it back into the business by purchasing new space or equipment. The owners can also keep the profit for themselves.

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What Is Supply? (pages 462–465)

Did You Know? You are a supplier. When you look for a job,you will be offering your labor (your “product”) for a price (yourpay). Let’s say you were offered a job washing cars for $5 percar. How many cars would you be willing to wash? Would youwash more cars at $8 per car? Would you wash even more if youreceived $10 per car? Most likely, you would be willing to sellmore of your labor at higher prices and less at lower prices. Asyou will see, you are an example of the law of supply in action.

Discussion QuestionWhy does a supply curve normally slope upward? (A supply curve slopes upwardbecause as prices rise, the quantity producers are willing to supply also rises. Higher prices mean more profits for producers. More profits serve as an incentive to supply a larger quantity.)

II. Graphing Market Supply (pages 464–465)

A. The market supply is the total of the supply schedules for all providers of the same good or service.

B. The market supply curve slopes upward, like individual supply curves do. Thisupward slope shows that all producers in the market would prefer to offer more of the product for sale at higher prices and less at lower prices.

C. Price has the most influence on the quantity supplied. For example, you would probably be willing to supply more of your labor at a high wage than at a low one.

D. Other factors also affect supply. If any factors change other than price, a change insupply will occur. That is, the entire curve will shift.

Discussion QuestionHow is a market supply curve similar to an individual supply curve? Explain. (Bothindividual and market supply curves slope upward. This reflects the fact that individual pro-ducers as well as all producers together in a market are generally willing to offer more of aproduct for sale at higher prices and less at lower prices.)

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I. Changes in Supply (pages 466–469)

A. A change in supply occurs when producers offer a different quantity of output at eachpossible price. This might happen because of changes in the cost of production, ingovernment policies, in the number of producers, or in the expectations of businesses.

B. When supply goes down, the supply curve shifts to the left. When supply goes up, thesupply curve shifts to the right.

C. Businesses use the four factors of production to produce goods and services. Whenprices of these resources fall, costs of production fall. Producers are then willing and ableto offer more of the product for sale at each price. The supply curve shifts to the right.

D. When prices of resources rise, production costs rise. Producers are then willing and ableto offer less of the product for sale at each price. The supply curve shifts to the left.

E. Productivity is the degree to which resources are being used efficiently to producegoods and services. Workers are more efficient when they produce more output in thesame amount of time. This reduces the company’s costs. More products are producedat every price, which shifts the supply curve to the right. When productivity falls, pro-duction costs go up. The supply curve shifts to the left.

F. Technology refers to the methods or processes used to make goods and services. Newtechnology can speed up ways of doing things, which can cut a business’s costs. Thispushes the supply curve to the right, showing that the business is willing to supplymore at the same price.

G. Government actions can affect the cost of production, causing a change in supply. In general, tighter government regulations restrict supply, causing the supply curve to shift to the left. Relaxed regulations lower the cost of production, shifting the supply curve to the right.

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Factors Affecting Supply (pages 466–469)

Did You Know? Throughout our nation’s history, new tech-nologies have helped American farmers become more productive.In 1830, it took about 250 to 300 hours of labor to produce100 bushels of wheat. Farmers used hand plows and sickles, andthrew seeds by hand. By 1890, horse-drawn plows had replacedhand plows and plow blades had improved. These and otherinnovations enabled farmers to produce 100 bushels of wheatwith only 40 to 50 hours of labor. Tractors came into wide use inthe early 1900s. Chemical fertilizers improved. Mechanical meth-ods of planting and harvesting were developed. By 1987, only 3hours of labor were required to produce 100 bushels of wheat.

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H. To businesses, higher taxes mean higher costs, pushing the supply curve to the left.Lower taxes mean lower costs, shifting the supply curve to the right.

I. A subsidy is a government payment to an individual, business, or other group forcertain actions. A subsidy paid to a producer lowers the cost of production. Thisencourages current producers to remain in the market and new producers to enter.When subsidies are repealed, costs go up, producers leave the market, and the supplycurve shifts to the left.

J. Producers’ expectations also affect supply. If they expect strong consumer demand,they will produce more. If they expect weak demand, they will produce less.

K. A change in the number of suppliers causes a change in market supply. As more firmsenter an industry, they increase the supply in the market, shifting the curve to theright. If some suppliers leave, supply decreases, shifting the curve to the left.

Discussion QuestionWhy might stores in Wisconsin stock up on snow shovels as winter nears? (The expectations of businesses affect supply. With winter snows on the way, the stores inWisconsin probably expect a strong demand for snow shovels in the near future. Therefore,they stock up.)

II. Elasticity of Supply (page 469)

A. Supply elasticity is a measure of how the quantity supplied of a good or servicechanges in response to changes in price. If the quantity changes a great deal whenprices go up or down, the product is said to be supply elastic. If the quantity changesvery little, the supply of that product is inelastic.

B. Supply elasticity depends on how quickly a company can change the amount it makesin response to price changes. Products that cannot be made quickly or that are expen-sive to produce tend to be supply inelastic. Products that can be made quickly withoutlarge investments of money or skilled labor tend to be supply elastic.

Discussion QuestionDo you think the supply curve for your local newspaper is elastic or inelastic?Explain. (Most likely, the supply curve is elastic. After the news has been gathered and thestories written, the cost of printing additional newspapers is relatively small. Also, if morefamilies wanted the newspaper, the publisher could print additional copies quickly withouthaving to add a lot of skilled labor.)

I. Supply and Demand at Work (pages 471–473)

A. Markets bring buyers and sellers together. The forces of supply and demand worktogether in markets to establish prices. In our economy, prices form the basis of economic decisions.

B. The graph on page 472 shows the supply and demand curves together.

C. A surplus is the amount by which the quantity supplied is higher than the quantitydemanded. On the graph, it appears as the horizontal distance between the supplyand demand curves at any point above where the curves cross.

D. A surplus signals that the price is too high. At that price, consumers will not buy all of the product that suppliers are willing to supply. In a competitive market, a surpluswill not last. Sellers will lower their price to sell their goods.

E. A shortage is the amount by which the quantity demanded is higher than the quan-tity supplied. On the graph, it appears as the horizontal distance between the supplyand demand curves at any point below where the curves cross.

F. A shortage signals that the price is too low. At that price, suppliers will not supply allof the product that consumers are willing to buy. In a competitive market, a shortagewill not last. Sellers will raise their price.

G. When operating without restriction, our market economy eliminates shortages andsurpluses. Over time, a surplus forces the price down and a shortage forces the priceup until supply and demand are balanced. The point where they achieve balance isthe equilibrium price. At this price, neither a surplus nor a shortage exists.

H. Once the market price reaches equilibrium, it tends to stay there until either supplyor demand changes. When that happens, a temporary surplus or shortage occurs until the price adjusts to reach a new equilibrium price.

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Markets and Prices (pages 471–475)

Did You Know? Before the Soviet Union broke up in 1991,it had a command economy. The government decided what toproduce, how much to produce, and the prices. Although priceswere often set low, supply seldom kept up with demand. Sovietconsumers would have to wait for hours in long lines to buy basicnecessities. To rent a tiny apartment, families had to wait as longas 10 years in some cities. In 1989, 15 percent of Soviet fami-lies lived in one room and 47 percent lived in two rooms. Onlyabout 37 percent of families had telephones.

I. Sometimes the government sets the price of a product because it believes the forces of supply and demand are unfair. A price ceiling is a government-set maximum pricethat can be charged for a good or service. A price floor is a government-set minimumprice that can be charged for a good or service.

Discussion QuestionWhat happens to the price of a product when its supply or demand changes? (Achange in supply or demand shifts its curve right or left. The market then has a temporarysurplus or shortage. If there is a surplus, the price will be driven down. If there is a shortage,the price will be driven up. The price will move in this way until the market establishes anew equilibrium price.)

II. Prices as Signals (pages 474–475)

A. Prices are signals that help businesses and consumers make decisions. They also helpanswer the basic economic questions.

B. Consumers’ purchases help producers decide WHAT to produce. Producers focus ongoods and services that consumers are willing to buy at prices that yield a profit.

C. Prices help businesses and consumers decide HOW to produce. To stay in business, a supplier must find a way to provide a good or service at a price consumers will pay.

D. Prices help businesses and consumers decide FOR WHOM to produce. Some busi-nesses aim their products at a small number of consumers who will pay higher prices.Others try to sell to larger numbers of people who want to spend less.

E. Consumers look for the best values for what they spend. Producers seek the best priceand profit for what they have to sell. The information that prices provide allows people to work together to produce more of the things people want.

F. Prices favor neither producer nor consumer. They are a compromise that results fromcompetition between buyers and sellers. The more competitive the market, the moreefficient the price adjustment process.

G. Prices are flexible. Unforeseen events affect supply and demand. Buyers and sellersreact to the new level of prices by adjusting their consumption and production. Soon,the system is functioning smoothly again.

H. The price system provides for freedom of choice. A market economy provides consumers a variety of products and prices from which to choose.

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I. In command economies, government planners decide how much of each product toproduce and limit the product’s variety. Products are offered at artificially low prices,but seldom are enough produced to satisfy everyone.

J. Prices are familiar. People can make buying decisions quickly and efficiently because they know exactly how much they would have to pay for the product.

Discussion QuestionDo prices in a competitive market favor producers or consumers? Explain. (Prices ina competitive market are neutral. They favor neither producers nor consumers. Prices resultfrom competition between buyers and sellers. In this way, they represent a compromise withwhich both sides can live.)

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I. Proprietorships (pages 480–481)

A. The most common form of business organization in the United States is the sole proprietorship, or proprietorship—a business owned and operated by one person.

B. A proprietorship is the easiest form of business to set up. Anyone can start a proprietorship whenever they want to.

C. Sole proprietors fully own the business and receive all the profits. They can makedecisions quickly, without having to consult others.

D. However, the owner has unlimited liability—the owner is financially responsiblefor all debts of the business. The owner’s personal assets may be seized to pay thedebts.

E. Sole proprietors have trouble raising financial capital—the money needed to helpthe business grow. Most use their own savings or borrow from friends and family.

F. Sole proprietors may also have trouble attracting qualified employees because theymay not be able to offer the same salaries and benefits that larger firms offer.

Discussion QuestionIf a sole proprietorship fails, how are the debts of the business paid? Explain.(Because sole proprietors have unlimited liability, they are financially responsible for alldebts of the business. Their personal property can be seized to pay the debts if the businessfails.)

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Types of Businesses (pages 480–485)

Did You Know? The owners of a corporation are the peoplewho buy shares of its stock. In most cases, anyone can be anowner. However, some corporations are completely owned bytheir employees. For example, most of the 40,000 employees ofSAIC, a high-tech scientific corporation, own all the stock. Thecompany founder believed that the people who contribute theirenergies to the company should benefit from its success. Also, hebelieved that employee-owners would be more motivated to deliv-er high-quality products and work together as a team to help thecompany prosper.

II. Partnerships (pages 481–482)

A. A partnership is a business owned by two or more people.

B. The articles of partnership is the legal agreement among partners that starts thebusiness. It identifies how much money each will contribute, how they will shareprofits, and what role each will play. It describes how to add or remove partners and how to break up the business if they want to close it.

C. Partnerships can raise money more easily by borrowing or adding new partners. Likeproprietors, partners pay no corporate income tax. Partners bring a range of talents to the business.

D. Partners have unlimited liability. Each is fully responsible for all business debts.

Discussion QuestionHow would a business benefit from having partners with different talents? (Eachowner can then oversee the part of the business that needs his or her particular talent. Thishelps the business succeed.)

III. Corporations (pages 482–485)

A. A corporation is a business that has many of the rights and responsibilities of indi-viduals. It can own property, sue, and be sued. It must pay taxes, but cannot vote.

B. A corporation starts with a charter—a government document granting permission toorganize. It describes the business and specifies the amount of stock, or ownershipshares of the corporation, that will be issued. The stockholders who buy the sharesown the business.

C. Stockholders elect a board of directors, which hires managers to run the business. A corporation’s owners and managers are different groups of people.

D. Corporations can raise money by selling new shares of stock. They can also borrowmore easily than can proprietorships or partnerships. The ease of raising capitalenables them to grow very large.

E. Professional managers run corporations. If the managers do not succeed, the boardcan replace them.

F. Ownership can be easily transferred by simply buying and selling stock.

G. Corporations have limited liability. Only the corporation, not its owners, areresponsible for the debts of the business. Individual stockholders can lose no morethan the amount of their investment.

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H. Corporations are often expensive and complex to set up.

I. Owners have little say in the management of the corporation.

J. Corporations are subject to more government regulation than other forms of business.They must release detailed financial reports regularly to keep stockholders informed.

K. Stockholders are subject to double taxation. First the corporation pays a tax on its profits. Then stockholders must pay income tax on the profits distributed to them.

L. A nonprofit organization, such as a church or social service agency, operates in a businesslike way to promote the interests of its members.

M. A cooperative is a voluntary association formed to carry out some kind of economicactivity to benefit its members. A consumer cooperative buys goods in bulk for itsmembers. A producer cooperative helps members promote or sell their products.

Discussion QuestionHow are owners of a corporation taxed differently from owners of proprietorshipsor partnerships? (Owners of corporations are subject to double taxation. First the corpora-tion pays tax on its profits. Then stockholders pay tax on the profits distributed to them. Soleproprietors and partners pay taxes on their profits, but their businesses do not pay a separateprofit tax.)

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I. Organized Labor (pages 486–488)

A. Labor unions are groups of workers who band together to have a better chance to obtain higher pay and better working conditions.

B. Workers who perform the same skills join a craft or trade union. Industrial unionsbring together workers who belong to the same industry.

C. Organized labor has three levels: local, national or international, and the federation.

D. A local union is made up of workers in a factory, company, or geographic area. It negotiates a contract with a company and monitors the contract’s terms.

E. National unions are the individual craft or industrial unions that represent localunions nationwide. Those with members in Canada or Mexico are internationalunions. National unions help employees set up local unions and negotiate contracts.In certain industries, the national union negotiates the contracts for the entire industry.

F. At the federation level is the AFL-CIO. It represents 13 million workers nationwide.

G. In the past some unions supported the closed shop. A worker would have to belongto the union to be hired. The Taft-Hartley Act of 1947 banned most closed shops.

H. The union shop is more common. Companies can hire nonunion workers, but theworkers must join the union once they begin work. One part of the Taft-Hartley Actallows state governments to ban union shops. Twenty-one states have passed right-to-work laws, which prevent unions from forcing workers to join.

I. Workers in a modified union shop do not have to join the union. If they choose to join, they must stay in the union as long as they work for that employer.

J. A majority of workers must vote in favor of a union before one can be formed. TheNational Labor Relations Board makes sure union votes are carried out honestly.

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Labor Unions (pages 486–489)

Did You Know? Mary Harris Jones was a legendary leaderin the labor movement of the late 1800s and early 1900s. Withstirring speeches, she inspired coal miners to strike for betterwages, shorter hours, and safer working conditions. She wasjailed several times, even when she was past 70 years old. Anangry district attorney once called her “the most dangerouswoman in America.” To her, this was a compliment. The miners,though, loved her. They called her simply “Mother Jones.”

Discussion QuestionWhat kind of union is the United Automobile Workers? Explain. (The UAW is a national industrial union. It brings together different types of workers who all belong to the automobile industry. It negotiates contracts for the entire industry nationwide.)

II. Negotiations (pages 488–489)

A. Under collective bargaining, union and company representatives meet to discussthe terms of the workers’ new contract when the old one nears its end. Negotiationsfocus on wages, benefits, work hours, and work rules.

B. If the two sides cannot agree on terms, they might try mediation, in which a thirdparty tries to help them reach an agreement. In some cases, they choose arbitration.A third party listens to both sides and decides on a settlement. Both parties agree inadvance to accept the arbitrator’s decision.

C. To pressure management to accept their position, workers can call a strike, in whichall workers in the union refuse to work. Strikers often picket the business, marchingin front of company buildings while holding signs. If striking doesn’t work, unionscan encourage people to boycott, or refuse to buy, the company’s products.

D. Management can stage a lockout, in which the company blocks workers from entering. Management hopes lost wages will pressure workers to accept its terms.

Discussion QuestionHow is mediation different from arbitration? (In mediation, the mediator tries to helplabor and management reach a compromise. In arbitration, the arbitrator actually decideshow to settle the disagreement, and both parties agree in advance to accept whatever the arbitrator decides.)

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I. The Roles of Business (pages 491–492)

A. Businesses play many roles in the economy. As consumers, they buy goods and services from other businesses.

B. As employers, businesses provide jobs and wages for millions of workers.

C. As producers, businesses provide a wide variety of goods and services.

Discussion QuestionWhat are three roles that businesses play in the economy? (Businesses act as consumers, employers, and producers.)

II. The Responsibilities of Business (pages 492–494)

A. Businesses have a responsibility to consumers to sell products that are safe and thatwork as promised. They also have a responsibility to advertise truthfully and to treatall customers fairly.

B. Meeting responsibilities is good business. Happy customers are likely to come back.

C. Sometimes the government steps in when a business does not meet its responsibili-ties. It might require the business to stop selling an unsafe product. It might sue thebusiness for violating customers’ rights.

D. Corporations have a responsibility to protect their stockholders by releasing financialstatements that report on sales, expenses, and profits. Auditors assure accuracy.

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Businesses in Our Economy (pages 491–494)

Did You Know? A growing number of investors today areusing their investment dollars to promote their social values.Called “socially responsible investing,” these investors choose tobuy only the stock of corporations that make positive contribu-tions to society or the environment. For example, an investorconcerned about waste may buy the stock of corporations thatuse recycled materials in their products. By investing this way,stockholders encourage corporations to behave responsibly.

E. Revealing this information is called transparency. The purpose is to provide theinformation investors need to decide if the cost of investment is worth the risk. Thegovernment can prosecute managers who say things about the business that are notcompletely honest.

F. Businesses have a responsibility to their employees to provide a safe workplace and to treat all workers fairly and without discrimination. That is, they cannot treatemployees differently on the basis of race, religion, color, gender, or age. The Americanswith Disabilities Act barred employers from treating workers unfairly who had mentalor physical disabilities.

G. Businesses have a social responsibility to pursue goals that benefit society as well asthemselves. Businesses meet their social responsibility by giving to charity, supportingcommunity projects such as Meals on Wheels, offering college scholarships, or helpingto preserve the environment.

Discussion QuestionWhy is full disclosure by corporations important? (Investors need full, accurate infor-mation about a corporation’s finances in order to decide whether the cost of investing in thecorporation is worth the risk. Distorted information can lead to financial disaster for manypeople, as it did in the Enron scandal.)

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I. Providing Public Goods (pages 502–503)

A. Businesses produce mostly private goods, or goods that when consumed by oneindividual cannot be consumed by another. Consumption of private goods and servic-es is determined by the exclusion principle. A person is excluded from an item’sconsumption unless he or she pays for it.

B. Public goods are goods that can be consumed by one person without preventingconsumption by another. Consumption of public goods is determined by the non-exclusion principle. No one is excluded from consuming public goods whether or not he or she pays.

C. Because of the difficulty of charging for public goods, the private sector would notprovide them. As a result, the government must provide public goods. It pays forthem with taxes.

Discussion QuestionIf the government did not provide street lights, would we have them? Explain.(Probably not. Street lights are a public good. Everyone benefits from them, whether or notthey pay, and it would be difficult to charge people for their use. Therefore, private businesseswould probably not provide street lights because they could not earn a profit from doing so.)

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The Role of Government (pages 502–506)

Did You Know? When the label says the food is “light,”what does that mean? Before an order by the Federal DrugAdministration took effect in 1994, manufacturers could describetheir foods any way they wanted. Descriptions such as “light,”“low fat,” or “lean” could mean anything. The order establisheddefinitions for such words. Now, for a label to say “light,” thefood must contain one-third less calories or no more than half thefat of the higher-calorie, higher-fat version. A “low fat” food mustcontain no more than 3 grams of fat per serving.

II. Dealing With Externalities (pages 503–504)

A. An externality is the unintended side effect of an action that affects someone notinvolved in the action. Public goods produce positive externalities. Everyone—not just drivers—benefits from good roads.

B. Many government activities encourage positive externalities. For example, the tinycomputer chips developed for the space program are now used in cars and appliances.

C. The government tries to prevent negative externalities—actions that harm an unin-volved third party. For example, dumping toxic waste in a river may cut costs for acompany, but the pollution would produce negative externalities for people who usethe river.

Discussion QuestionSuppose your city used tax dollars to build a stadium for a professional sportsteam. What are some positive externalities that might result from this action? (The stadium would bring people to the area, where they would likely buy products in localstores. People from out of town would stay in local hotels and eat at local restaurants. Also, a professional sports team gives a city prestige that could attract businesses to the area, pro-viding more jobs for local people.)

III. Maintaining Competition (pages 504–505)

A. Markets work best when there are many buyers and sellers. When a market is controlled by a monopoly, or sole provider, that company can charge any price.

B. Antitrust laws are intended to control monopoly power and to preserve and pro-mote competition. The Sherman Antitrust Act of 1890 banned monopolies and otherbusiness combinations that prevented competition. The government used this law tobreak up AT&T to allow more competition in telephone service.

C. A merger is a combination of two or more companies to form a single business. If thegovernment feels a merger would result in less competition and higher prices for con-sumers, it may stop the merger.

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Discussion QuestionHow could a monopoly affect consumers? (In a market controlled by a monopoly, thesole provider could charge any price it wanted. Without competition from other providers,consumers would either have to pay the high price or do without the product.)

IV. Regulating Market Activities (pages 505–506)

A. To reduce negative externalities, governments regulate some business activities.Government agencies make sure that businesses act fairly and follow the laws.

B. A natural monopoly is a market situation in which the costs of production are minimized by having a single firm produce the product. To prevent abuses, the government regulates the sole provider.

C. The government requires truth in advertising and product labeling. The Federal Trade Commission deals with false advertising and product claims. The Food and Drug Administration enforces the purity, effectiveness, and labeling of food, drugs,and cosmetics.

D. The government also regulates product safety. The Consumer Product SafetyCommission recalls unsafe products. In a recall, a company pulls the product off the market or agrees to change it to make it safe.

Discussion QuestionWhy is it important for food labels to list the contents? (Some people are allergic tocertain products like eggs, milk, and peanuts. Other people, such as diabetics, need to knowthe contents of food because they have to watch their sugar intake.)

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I. Measuring Growth (pages 508–509)

A. When the economy grows, businesses are producing more goods and services, and they hire more workers. People then have more money and buy more.

B. The gross domestic product (GDP) is a measure of the economy’s growth. It is the dollar value of all final goods and services produced in a country in a year.

C. When prices increase, GDP would go up even if the economy was not growing. Toavoid this false impression, economists use real GDP. Real GDP shows an economy’sproduction after the distortions of price increases have been removed.

Discussion QuestionHow is it possible for GDP to go up when the economy is not growing? (GDP is the value of all final goods and services measured in dollars. When prices go up, the sameamount of goods and services would have a higher dollar value. As a result, rising prices can cause GDP to rise even when the economy is not growing.)

II. Business Fluctuations (pages 509–510)

A. The economy goes through alternating periods of growth and decline called the business cycle.

B. An economic expansion takes place when real GDP goes up. At some point, realGDP reaches a peak, or the highest point in an expansion. Then it starts to decline.

C. Expansions are normally longer than recessions. A recession takes place when realGDP goes down for six straight months. An average recession lasts about one year.Recessions are painful times. The economy declines, and many people lose their jobs.

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Measuring the Economy (pages 508–513)

Did You Know? Suppose you lived in the United States in1800. You bought a loaf of bread for 25 cents. How much wouldyou have to pay for a similar loaf today? About $2.50. Now sup-pose you bought a house in 1800 for $10,000. To buy thatsame house today, you would have to pay about $99,981! Yourdollar buys less today than it did in 1800 because of generallyrising prices, or inflation.

Discussion QuestionDescribe the business cycle. (The business cycle is the alternating periods of growth anddecline that the economy normally experiences. The economy expands, reaches a peak, andthen declines into a recession before expanding again. Expansions are generally longer thanrecessions.)

III. Unemployment (page 510)

A. The civilian labor force includes all civilians 16 years old or older who are eitherworking or looking for work. The unemployment rate is the percentage of peoplein the civilian labor force who are not working but are looking for jobs.

B. The unemployment rate reflects the health of the economy. The unemployment ratetends to rise sharply during recessions and then slowly decline.

C. Unemployment affects the income of the economy as a whole and of individuals.When people lose their jobs, they must cut back their purchases. Some go into debt.

Discussion QuestionSuppose you are 16 years old. You don’t have a job but you are not looking forone. Would you be counted as “unemployed” in figuring the unemployment rate?Explain. (No. You meet two of the criteria—you are old enough and you do not have a job.However, to be considered “unemployed” in figuring the unemployment rate, you would alsohave to be looking for work.)

IV. Fiscal Policy (pages 510–511)

A. To try to reduce high unemployment, the government uses fiscal policy. It changesthe way it taxes or spends.

B. Government might cut taxes to give people more money to spend. It hopes theirincreased purchases will prompt businesses to hire more workers to boost production.

C. Government might buy more goods and services itself, trying to convince businessesto hire more workers to boost production.

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Discussion QuestionWhy is fiscal policy often not very effective? (Politics often get in the way. It is usuallydifficult to implement effective fiscal policies when recessions are short and political leadershave different ideas about what should be done.)

V. Price Stability (pages 511–512)

A. Inflation is a sustained increase in the general level of prices. It hurts the economybecause it reduces purchasing power and may alter the decisions people make.

B. To track inflation, the government samples prices every month for about 400 productscommonly used by consumers. These prices make up the consumer price index(CPI), which is a measure of the price level. The rate of inflation is the change in theaverage level of prices as measured by the CPI.

C. If the price of an item doubles, you would need twice as many dollars to buy theitem. In other words, the purchasing power of your dollar has fallen.

D. Inflation is particularly hard on people with fixed incomes. Inflation also reduces thevalue of money in a savings account. The money will buy less than before inflation.

E. Prices act as signals that help individuals and businesses make economic decisions.High inflation distorts this process. People begin to speculate rather than invest incapital goods and services, causing the economy to suffer. Government can do little to prevent inflation.

Discussion QuestionSuppose you read that the inflation rate is 5 percent. What does this mean? (Thismeans that the average level of prices, as measured by the consumer price index, has risen by5 percent.)

VI. Stocks and Stock Markets (pages 512–513)

A. Investors can earn profits from stocks in two ways: dividends and capital gains.Dividends are a share of a corporation’s profits that are distributed to stockholders. A capital gain occurs when stock can be sold for more than it originally cost to buy.

B. Supply and demand determine the price of a company’s stock. Factors such aschanges in sales or profits or news of a technological breakthrough can changedemand for a company’s stock and, therefore, its price.

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C. Stock indexes are statistical measures that track stock prices over time. Investors consult stock indexes to follow the performance of their stocks.

D. The Dow-Jones Industrial Average (DJIA) and Standard & Poor’s (S&P) are stockindexes that track a group of representative stocks. These indexes reflect the generalwell-being of the stock market as a whole.

E. Shares of stock are bought and sold at a stock market, or stock exchange.

F. Most stocks in the United States are traded on the New York Stock Exchange (NYSE),American Stock Exchange, or an electronic stock market like the NASDAQ. Computersallow investors to trade major stocks around the clock, anywhere in the world.

G. Stock indexes also reveal investors’ expectations about the future. If investors expectrapid economic growth, high profits, and low unemployment, then stock prices tendto rise in what is called a “bull market.” If investors are pessimistic, stock prices tendto fall in what is called a “bear market.”

Discussion QuestionWhat makes a stock’s price go up and down? (Supply and demand determine stockprices. Factors that affect the demand for a stock will also affect its price. These factors includechanges in the company’s sales or profits, rumors of a possible takeover, news of a technologi-cal breakthrough, and investors’ expectations about future economic growth.)

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I. Income Inequality (pages 515–516)

A. Education, family wealth, and discrimination are common reasons for income differences in the United States.

B. Level of education has a major impact on a person’s income. For this reason, the government offers programs such as free lunches, college grants, and low-interestloans to encourage people to improve their education.

C. People born to wealthy parents often have access to excellent colleges and to businessopportunities.

D. As a result of discrimination, women and members of minority groups may not behired into high-paying jobs or receive desirable promotions.

E. The Equal Pay Act of 1963 requires equal pay for jobs that require equivalent skillsand responsibilities. The Civil Rights Act of 1964 bans discrimination on the basis ofgender, race, color, religion, and national origin. The Americans with Disabilities Actof 1990 extends this protection to people with physical or mental disabilities.

Discussion QuestionHow does level of education affect a person’s income? (Level of education has a majorimpact on income. The average income of someone with a bachelor’s degree is nearly twicethat of a high school graduate. More advanced degrees increase income even more.)

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Government, the Economy, and You (pages 515–518)

Did You Know? The federal government created its first wel-fare programs to give pensions to Revolutionary War veterans. Inthe late 1800s, the pensions were extended to cover the widowsand orphans of Civil War soldiers. The Great Depression of the1930s marked a major expansion of federal assistance programs.At that time, about 1 out of 4 workers had no job. To help relievethe suffering, the government passed the Social Security Act. Partof this law provided cash payments to people who were out ofwork through no fault of their own.

II. Poverty (pages 516–518)

A. The government offers programs to help people living in poverty. To determine who is eligible, the government sets guidelines based on estimates of how much it costs to buy enough food, clothing, and shelter to live.

B. Food stamps are government coupons that can be used to purchase food. Low-income Americans can obtain a small number of stamps at little or no cost.

C. The Women, Infants, and Children (WIC) program provides help with nutritionand health care to low-income women and children up to age 5.

D. Some programs make cash payments. Supplemental Security Income (SSI) gives payments to blind or disabled people and to persons age 65 and older.

E. Temporary Assistance to Needy Families (TANF) makes payments to families whoneed help because a parent is dead, disabled, or absent. It limits the number ofmonths that someone can receive benefits to encourage people to look for payingwork rather than rely on the program.

F. Workfare describes programs that require welfare recipients to work for benefits.These programs are designed to teach people the skills they need to succeed in a job.

G. A progressive income tax is a system that taxes lower incomes at a lower rate andhigher incomes at a higher rate. This helps lower-income people by taking a smallerportion of their income in taxes.

H. The Earned Income Tax Credit (EITC) gives tax credits and even cash payments to qualified workers.

Discussion QuestionWhy does TANF limit the number of months people may receive benefits? (The pro-gram sets a time limit to make sure people will look for paying work rather than rely on theprogram.)

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I. Money (pages 524–525)

A. Money has three functions. It serves as a medium of exchange, a store of value, and a measure of value.

B. Anything that people will accept in exchange for goods can serve as money. In thepast, people have used salt, animal hides, gems, and tobacco as mediums of exchange.

C. Coins are metallic forms of money. Currency includes both coins and paper money.Checking and savings accounts are also forms of money.

D. We value and accept money because we know someone else will accept its value aswell. Without this confidence, we would not accept it from someone else as payment.

E. Money by itself has no other value. The materials used to make coins and papermoney are worth less than the value of the items as currency.

Discussion QuestionWould you accept a handful of seashells as payment for a baby-sitting job? Why or why not? (Unless you particularly like to collect seashells, you probably would not acceptthem as payment. You know that no one else would likely accept them as payment for a goodor service you want to buy.)

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What Is Money? (pages 524–527)

Did You Know? If you read a pirate story, you will probablyrun across a type of money called “pieces of eight.” These werelarge, silver Spanish coins commonly used by the Americancolonists at a time when pirates roamed the seas. When peopleneeded to make change, they would chop the coin into eight pie-shaped pieces. Each piece was called a “bit.” Two bits wereworth a quarter of a dollar. Today you may still hear someonerefer to a quarter as “two bits.”

II. The Financial System (pages 525–527)

A. Money saved at a financial institution does not stay there. The institution lends it. The interest charged on the loans pays expenses and earns a profit for the institution.

B. Commercial banks offer full banking services. Most people have their checking andsavings accounts in commercial banks.

C. Savings and loan associations (S&Ls) traditionally loaned money to buy homes.Today, S&Ls perform many of the activities that commercial banks do.

D. Credit unions are nonprofit organizations sponsored by large businesses, laborunions, or government institutions. Only workers of the sponsor may use the credit union.

E. All financial institutions bring savers and borrowers together.

F. Regulation and insurance work to keep our financial system safe.

G. Financial institutions report to regulatory agencies. They must follow rules andaccounting practices that minimize unnecessary risk.

H. The Federal Deposit Insurance Corporation (FDIC) is a federal corporation that insures individual accounts in financial institutions. If a bank fails, the FDIC will return to depositors the amount of their deposit up to a maximum of $100,000.

I. The FDIC was created after the stock market crashed in 1929, and the resulting crisiswiped out people’s savings. Insurance helps people feel that they can safely deposittheir money in a financial institution.

Discussion QuestionWhat similar function do different kinds of financial institutions perform? (Eachkind of financial institution brings savers and borrowers together. They give people a safeplace to deposit their money when they want to save it and a source for borrowing when theyneed a loan.)

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I. Structure and Organization (pages 529–530)

A. The Federal Reserve System, or the Fed, is the central bank of the United States. It is a banker’s bank. When banks need money, they borrow from the Fed.

B. The United States is divided into 12 Federal Reserve Districts. Each has one mainFederal Reserve Bank and most have branch banks.

C. Federally chartered commercial banks must be members of the Fed. State charteredbanks may join. Member banks buy stock in the Fed and earn dividends from it.

D. The president appoints the seven members of the Board of Governors and selects oneto chair the board for a four-year term. The board is independent of the president andCongress. This allows it to make economic decisions free from political pressure.

E. Officials of district banks serve on the Fed’s advisory councils. These councils keep theFed informed on economic conditions in each district, on financial institutions, andon issues related to consumer loans.

F. The Federal Open Market Committee (FOMC) is the Fed’s major policy-makinggroup. Its 12 members make decisions that affect the economy as a whole by manipu-lating the money supply.

Discussion QuestionWhy can the Fed’s Board of Governors make economic decisions independent ofpolitical pressure? (The board is independent of the president. Also, Congress has little con-trol or influence over the board because the board does not depend on Congress for an annualappropriation for operating expenses.)

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The Federal Reserve System (pages 529–533)

Did You Know? Take a $1 bill from your pocket and look at it. You will see the words “Federal Reserve note” and a greenTreasury seal. See if you can find the markings that identify theFederal Reserve Bank that issued the bill. What you can’t see isthat each bill contains a special security thread that glows in thedark when viewed under ultraviolet light. This thread is designedto foil counterfeiters. The bill you are holding will not remain incirculation for long. Most $1 bills wear out after about 18 monthsof use.

II. Functions of the Fed (page 531)

A. The Fed oversees most large commercial banks. It can block a merger between banksif the merger would lessen competition. It also oversees the international business ofAmerican banks and foreign banks that operate in this country.

B. The Fed enforces laws that deal with consumer borrowing.

C. The Fed also acts as the government’s bank. The government deposits revenues in theFed and withdraws it to buy goods.

D. The Fed sells U.S. government bonds and Treasury bills, which the government usesto borrow money.

E. The Fed issues the nation’s currency. Government agencies produce the money, butthe Fed controls its circulation.

Discussion QuestionWhat are three ways in which the Fed acts as the government’s bank? (The Fedholds the government’s money, sells government bonds and Treasury bills, and issues thenation’s currency.)

III. Conducting Monetary Policy (pages 531–533)

A. Monetary policy involves controlling the supply of money and the cost of borrow-ing money according to the needs of the economy.

B. On a graph, the point where the supply of money and demand for money meet setsthe interest rate that people and businesses must pay to borrow money. The Fed canchange interest rates by changing the money supply.

C. If the Fed wants a lower interest rate, it expands the money supply, which moves the supply curve to the right. If it wants a higher interest rate, it contracts the moneysupply, which shifts the supply curve to the left.

D. The Fed can manipulate the money supply through the discount rate, reserve requirement, and open market operations.

E. The discount rate is the rate the Fed charges member banks for loans. If the Fedwants to stimulate the economy, it lowers the discount rate. Low rates encouragebanks to borrow from the Fed to make loans to their customers.

F. To slow the economy, the Fed raises the discount rate to discourage borrowing. This contracts the money supply and raises interest rates.

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G. Member banks must keep a certain percentage of their money in Federal ReserveBanks as a reserve. The Fed can raise the reserve requirement to reduce the moneybanks have available to lend. It can lower the reserve requirement to increase themoney banks have to lend.

H. Open market operations are the purchase or sale of U.S. government bonds and Treasury bills. Buying bonds from investors puts more cash in investors’ hands,increasing the money supply. This shifts the supply curve of money to the right,which lowers interest rates. The economy grows as people borrow more and spendmore. To lower interest rates, the Fed sells bonds.

I. Monetary policy can be implemented more quickly than can decisions made by politicians who must consider many different views.

J. The Fed can watch the results of its actions and act quickly to adjust when needed.

K. The Fed can influence business investment and consumer spending by manipulatinginterest rates.

Discussion QuestionWhat are three ways that the Fed can increase the money supply? (To increase themoney supply, the Fed can lower the discount rate, reduce the reserve requirement, or buygovernment bonds from investors.)

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I. Banking Services (pages 534–535)

A. Banks are started by investors, who pool their financial assets to provide bankingservices to people in their community. To grow and prosper, banks need depositors.

B. Checking accounts allow customers to write checks or use check cards to pay billsor transfer money from one person to another.

C. When people have money they can leave untouched for longer periods, they depositit in a savings account. This account earns interest based on the amount in theaccount. The longer the money is left in the account, the larger it grows.

D. With a certificate of deposit (CD), customers give a certain amount to the bank fora specific period of time. The money earns interest during that time, but if customerstake it out early, they must pay a substantial penalty. Banks usually pay higher inter-est rates for CDs than for savings accounts.

E. Banks lend money to businesses and consumers. Loans increase the supply of money.

Discussion QuestionWhy might you choose to put your money into a certificate of deposit rather thana savings account? (Banks usually pay higher interest rates on CDs than savings accounts.However, you should choose a CD over a savings account only if you can afford to leave themoney in the bank for the required time period. The penalty for early withdrawal on a CDwould take away the benefit of the higher interest rate.)

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How Banks Operate (pages 534–537)

Did You Know? The federal government first issued papermoney in 1861 to pay Civil War expenses. These notes wereprinted in green on the reverse side. At first, people couldexchange their notes for metal coins if they wished. The govern-ment ended this policy in 1862. Without metal coins to assurethe value of these notes, people said that they were backed onlyby green ink. As a result, the paper money became known as“greenbacks.”

II. Changes in the Banking Industry (pages 535–537)

A. The Bank of the United States received its federal charter in 1791. It collected feesand made payments on behalf of the federal government. The charter was allowed to lapse in 1811, partly because of opposition from state banks.

B. The Second Bank of the United States was chartered in 1816. After its charter lapsed,only state banks remained. The federal government did not regulate state banks.

C. State banks issued their own currency. These notes made up most of the money supply until the federal government began printing money during the Civil War.

D. The National Banking Act of 1863 created a system of dual banking, in which bankscould have either a state or federal charter. Federally chartered private banks issuednational currency backed by U.S. government bonds.

E. Bank crises occurred in 1873, 1884, 1893, and 1907. The Panic of 1907 resulted inthe Federal Reserve Act of 1913. In 1914, the Fed began issuing Federal Reservenotes, which became the major form of currency in circulation.

F. During the Great Depression of the 1930s, bankrupt people and businesses could notrepay their loans. A financial panic forced thousands of banks to collapse. PresidentFranklin Roosevelt declared a “bank holiday,” closing all banks. Each bank couldreopen only after it proved it was financially sound.

G. Congress passed the Glass-Steagall Banking Act, establishing the Federal DepositInsurance Corporation. The FDIC helped restore public confidence in banks.

H. The government tightly regulated financial institutions after the Great Depression. In the late 1970s, Congress began deregulating—relaxing the restrictions.

I. In 1982 Congress decided to allow the S&Ls to make higher-risk investments. Whenthese investments went bad, hundreds of S&Ls failed. The government insured S&Ldeposits. Bailing out the S&Ls cost taxpayers about $200 billion.

J. The Gramm-Leach-Bliley Act of 1999 permits bank holding companies greater free-dom to offer a full range of financial services. Critics warn that the act may weakencompetition for financial services. Others caution that it may lead to violations of privacy, as affiliated companies share customer information.

Discussion QuestionDuring the Great Depression, why did President Roosevelt declare a “bank holi-day”? (The “bank holiday” closed all banks. Each bank was allowed to reopen only after it proved it was financially sound. This action helped restore public confidence. If a bank was allowed to reopen, people could trust that it was safe.)

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I. Preparing the Budget (pages 542–543)

A. Each year, the president and Congress create the federal budget, which is a plan for how the government will raise and spend money.

B. A fiscal year (FY) is a 12-month period that may or may not match the calendaryear. The federal budget covers a fiscal year that begins October 1 and endsSeptember 30 of the following calendar year.

C. By law, the president must present a budget to Congress by the first Monday inFebruary.

D. Congress then passes a budget resolution. This document totals revenues andspending and sets targets for how much will be spent in various categories.

E. Mandatory spending is spending that does not need annual approval.Discretionary spending is spending that must be authorized each year.

F. Before the government can actually spend any money, Congress must pass an appropriations bill to authorize spending for a particular activity. Congress splitsdiscretionary spending into 13 separate bills. The bills follow the normal process forany bill.

G. Appropriations bills must be finalized by September 15. If not, Congress and the president can agree to a temporary appropriation until the appropriation bill for thatcategory becomes law.

Discussion QuestionCould a period beginning January 1 and ending the following December 31 be afiscal year? Explain. (Yes. A fiscal year is a 12-month period that may or may not matchthe calendar year.)

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The Federal Government (pages 542–546)

Did You Know? Like anyone who takes out a loan, the government must pay interest on money it borrows. In fiscal year2002, the government paid over $164 million in interest on thenational debt. But to whom does the government owe so muchmoney? It owes a large portion of it to individual Americans! Ifyou buy a U.S. savings bond or invest in a Treasury bill, you areloaning the government money. The interest you collect on yourinvestment comes from the pockets of taxpayers.

II. Federal Revenues (pages 543–545)

A. The two main parts of the federal budget are revenues and expenditures.

B. Income taxes make up nearly half the federal government’s revenue. Part of workers’paychecks is withheld each payday. At the end of the year, workers file a tax returnthat calculates the income tax the worker owes. If too much was withheld, the work-er will receive a refund. If too little was withheld, the worker must pay the difference.

C. About 10 percent of federal revenues come from income taxes paid by corporationson their profits.

D. About one-third of federal revenues come from payroll taxes deducted from work-ers’ paychecks to fund Social Security and Medicare. Social Security is a programthat provides money to people who are retired or disabled. Medicare pays somehealth care costs of elderly people.

E. Consumers pay excise taxes when they buy goods such as gasoline, tobacco, alcohol,legal betting, and telephone service.

F. The federal government collects an estate tax on wealth passed on to a person’s heirs.It also charges tax on certain gifts. Small sources of revenues include fees to enternational parks and fees that oil companies pay to drill for oil on public land.

G. Taxes in the United States are classified as proportional, progressive, or regressive.

H. A proportional tax takes the same percentage of income from everyone regardless of how much he or she earns.

I. With a progressive tax, the tax rate increases as income increases. The higher theincome, the larger the percentage of income paid as taxes.

J. With a regressive tax, the percentage paid goes down as income increases.

Discussion QuestionIs a worker’s income tax equal to the total amount withheld from his or her pay-checks? Explain. (Not necessarily. The money withheld from each paycheck is applied to theworker’s income tax. However, the worker figures the income tax she actually owes when shedoes her annual tax return. If she owes less than the amount withheld, she will receive arefund. If she owes more than the amount withheld, she must pay the difference.)

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III. Federal Expenditures (pages 545–546)

A. Social Security was the largest federal spending category in 2002. As the populationages, spending on Social Security and Medicare is likely to rise.

B. Income security includes benefits paid to workers who retired from government, military, and railroad jobs. It also provides money to disabled coal miners and poorerAmericans for housing and child nutrition.

C. The health category includes Medicaid, which pays for health care for people withlow incomes. This category also includes spending on medical research.

D. National defense is the second largest spending category. President George W. Bushhas requested an increase to pay the cost of the war on terrorism.

E. Each year, some portion of the budget goes to pay interest on the money the govern-ment has borrowed. The amount paid depends on the size of the debt and the interestrates.

F. The government also spends billions on programs from education to highways to natural resources.

Discussion QuestionWhat categories of spending are likely to rise as the population continues to age?(Social Security and Medicare spending is likely to rise. Both of these programs provide bene-fits for older Americans.)

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I. Sources of Revenue (pages 548–551)

A. The largest source of revenue for state governments is intergovernmental revenues. This is money that one level of government receives from another level.The federal government gives states money for welfare, highways, hospitals, andother activities.

B. Sales tax, the second-largest source, is a tax on consumer purchases. A percentage of the purchase price is added to arrive at the final price the consumer pays. The merchant turns over the taxes to a state government agency.

C. Internet purchases are not subject to sales tax, which cuts into state revenues.

D. Five states have no sales tax. In other states, rates range from 2.9 to 7 percent.

E. The third-largest source comes from contributions that states and state governmentworkers make to their own retirement plans.

F. The last major category of revenue is state income taxes. Some states tax a percentageof the federal income tax. A few charge a single rate to all taxpayers. In others, therate goes up as income goes up. Seven states have no state income tax.

G. For many local governments, intergovernmental revenues are even more importantthan they are for states. States provide most of this money.

H. The second-largest source of local revenue is property taxes. These are taxes that people pay on the real property or personal property they own. Real propertyincludes land and buildings. Personal property includes portable objects, such as jewelry or cars. Most local governments now tax only real property.

I. Water and electric utility systems provide the third largest source of revenue.

J. In some places, taxpayers pay three income taxes: federal, state, and local.

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State and Local Governments (pages 548–552)

Did You Know? By the year 2000, the average cost to edu-cate one public elementary or high school student for one yearstood at about $6,600. Local school districts provide about 32percent of the cost. State governments provide about 43 percent.The rest comes from the federal government and private sources.As the costs of education continue to rise, local districts are find-ing it hard to raise enough money. To reduce costs, some districtshave had to close schools for part of the year or cut back schoolprograms. Others have tried to use school facilities more fully byextending the schedule to 12 months.

K. Sales tax is a tax on goods and services. It is usually a percentage of the selling price.

L. Fines for traffic violations and fees for special services also provide revenue for local governments.

Discussion QuestionHow do state governments gain revenue from contributions made by state govern-ment workers to their own retirement plans? (State governments gain revenue byinvesting these funds until they are needed to pay retirement benefits.)

II. Expenditures (pages 551–552)

A. Most public welfare spending covers entitlement programs. These programs provide health, nutritional, or income payments to people who meet eligibilityrequirements.

B. Higher education is the second largest spending category for state governments. States subsidize, or pay part of the costs, of a college education. Without this subsidy,college students would have to pay more in tuition and other fees.

C. A small portion of state money is spent on the categories of employee retirementplans and hospitals and health.

D. Many states pay a large percentage of local public school costs, but local school dis-tricts generally provide most of the money and make the key decisions regarding theoperation of public schools. Elementary and secondary education accounts for morethan one-third of local government spending.

E. A large part of local budgets goes for police and fire protection.

F. Local governments make decisions regarding water service. Smaller communities may contract with private companies to supply water. Some local governments havecreated special water districts.

G. Local governments are responsible for sewage disposal. Many maintain sewage treatment plants to conserve supplies of useful water. Some local governments use garbage-processing plants rather than landfills to dispose of solid wastes.

Discussion QuestionWhy have some local governments created special water districts? (The threat of pollution has prompted some local governments to create special water districts. In case of a water shortage, such districts or local governments may try to limit the amount of waterused.)

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I. Surpluses and Deficits (pages 553–554)

A. Budgets are built on forecasts, or predictions. If expenses are higher than expected or revenues are lower, the budget is in trouble.

B. The government enjoys a surplus when it spends less than it collects in revenues. It runs a deficit if it spends more than it collects.

C. When the government runs a deficit, it must borrow money to pay its bills. It doesthis by selling bonds. A bond is a contract to repay the borrowed money with interestat a specific time in the future. All the money that has been borrowed over the yearsbut not yet repaid is the government’s debt.

D. When spending equals revenues, the government has a balanced budget. The feder-al government is not required by law to balance the budget, but many state and localgovernments are.

Discussion QuestionMany state governments are required by law to balance their budgets. How canbad economic times make budgeting difficult for these governments? (Revenuesoften go down during bad economic times. Yet those are the times when states need to spendmore on entitlements. This can make budgeting difficult.)

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Managing the Economy (pages 553–557)

Did You Know? In 2002, government planners were pre-dicting a budget surplus of about $5.6 trillion over the next 10years. President George W. Bush proposed to give $1.6 trillion of the surplus back to taxpayers through a tax cut. Polls showedthat most Americans favored a tax cut. However, many believedthat the cut was too large. They feared there would not beenough money left to pay Social Security benefits to all workerswho retire or enough to pay down the huge government debt.Many opponents also charged that the kinds of cuts Bush pro-posed would favor the rich over the poor.

II. Fiscal Policy (pages 555–557)

A. Fiscal policy is the use of taxes and spending to help the economy grow.

B. In theory, the government can stimulate the economy during a recession by increas-ing spending and cutting taxes. These steps might also increase deficits, driving up thefederal debt.

C. When the economy begins to grow again, the government can reduce spending andincrease taxes. This would produce a surplus, which could lower the debt.

D. In practice, these decisions are difficult. Regardless of the state of the economy, manypeople want lower taxes. Also, many want government services, making it difficult tocut spending. As a result, the government sometimes spends large sums even whenno stimulus is needed.

E. When political leaders do agree that a stimulus is needed, they often argue over howthe money should be spent.

F. After the leaders finally agree on a stimulus plan, it may take even longer to pass theneeded appropriations. By that time, the economic situation may have changed.

G. Fortunately, the economy has a number of automatic stabilizers. These programsbegin working to stimulate the economy as soon as they are needed. They are alreadyin place and do not need further government action.

H. Unemployment insurance programs are one example. When people lose their jobs—as in a recession—unemployment payments provide some help until they find a job.

I. Welfare programs also provide automatic assistance. People might begin to collectwelfare or Medicaid when their incomes fall below a certain level. These paymentshelp prevent consumer demand from falling even lower—which would force busi-nesses to lay off even more workers.

J. The fact that the federal income tax is progressive is another stabilizer. When peoplelose their jobs, their income goes down. They then pay less in taxes, which eases theimpact of the cut in income.

K. When the economy recovers, the opposite happens. People make more money andcollect less in entitlements. Automatic stabilizers go into effect more rapidly than discretionary fiscal policies—policies that the government chooses to implement.

Discussion QuestionWhy are fiscal policies often difficult to implement in a booming economy? (In theory, the government should raise taxes and cut spending in a booming economy.However, many people want lower taxes regardless of the state of the economy. Many alsowant government services, so they don’t want the government to cut spending even duringgood economic times.)

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I. Why Nations Trade (pages 564–565)

A. In a recent year, about 8 percent of all the goods produced in the United States were exported, or sold to other countries. A slightly larger amount of goods wereimported, or purchased from abroad.

B. Trade is one way that nations solve the problem of scarcity.

C. Nations trade for some goods and services because they could not have them otherwise. The United States buys bananas from other countries because it does nothave the soil and climate to grow them. Countries that do not have the factories andskilled workers to make airplanes buy them from the United States.

D. Comparative advantage is the ability of a country to produce a good at a loweropportunity cost than another country can. The United States could make color televisions. However, other countries can make them at a lower cost, so the UnitedStates buys many color televisions from these countries.

E. Comparative advantage leads nations to specialize. They use their scarce resources to produce those things that they produce better than other countries. When theyproduce more than their people can use, they sell the extra amount abroad.

F. Sometimes a country has a comparative advantage in a particular resource, such asoil. Sometimes comparative advantage is based on labor and capital.

G. Trade creates jobs. To fill additional orders from abroad, companies must hire moreworkers.

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International Trade and Its Benefits (pages 564–570)

Did You Know? The 15 member nations of the EuropeanUnion grant all their people “European citizenship.” This meansthat citizens of any member nation may freely choose to live andwork in any other member nation. For example, a citizen of Italymay live and work in France as easily as someone born in Ohiocould choose to live and work in Michigan. European citizenshipalso allows citizens of member nations to vote in local electionsin any member nation where they live. For example, the Italiancitizen living in France could vote in local French elections.

Discussion QuestionWhy doesn’t the United States grow its own coffee rather than buy it from othercountries? (The United States does not have the soil and climate to grow coffee efficiently.Therefore, it makes economic sense for the United States to use its scarce resources to produceother products it can produce efficiently and buy those it can’t, such as coffee, from abroad.)

II. Barriers to International Trade (pages 565–569)

A. Foreign countries with a comparative advantage can sell their product more cheaplythan can companies making the product in their own country. Consumers will likelybuy the cheaper foreign product. Workers who make the product in their own coun-try may lose their jobs as sales drop. When this happens, the government may imposetrade barriers to protect the affected workers and industries.

B. A tariff is a tax on an imported good. The goal is to make the price of imported goodshigher than the price of the same good produced domestically. As a result, consumerswould be more likely to buy the domestic product.

C. When people want the product so badly that higher prices have little effect, countriesmay set quotas, or limits on the amount of foreign goods imported. During the1970s, President Ronald Reagan placed quotas on Japanese cars to protect Americanautomakers.

D. Sometimes barriers do not work. The Japanese responded to the quotas by buildingfactories in the United States, which provided jobs for American workers. However,the quotas then could not protect American car companies.

E. Trade barriers force consumers to pay higher prices for the sake of protecting inefficient industries.

F. In general, trade barriers cost more than the benefits gained. For this reason, mostcountries now aim to achieve free trade. They try to convince countries not to passlaws that block or limit trade.

G. A recent trend is for countries to join with a few key trading partners to form freetrade zones.

H. The European Union (EU) is an organization of European countries, which forms ahuge market. Goods flow freely among these nations because the EU has no tradebarriers. Most member countries also adopted a common currency, the euro.

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I. In the 1990s, the United States, Canada, and Mexico signed the North AmericanFree Trade Agreement (NAFTA). This deal eliminated all trade barriers amongthese countries.

J. Opponents of NAFTA contended that American workers would lose their jobs becauseU.S. plants would move to Mexico. There the companies could get cheaper labor andless strict enforcement of environmental and workers’ rights laws.

K. NAFTA supporters argued that increased trade would stimulate growth and put morelow-cost goods on the market.

L. The World Trade Organization (WTO) oversees trade among nations. It organizesnegotiations about trade rules and helps countries trying to develop their economies.Critics say that WTO policies favor corporations at the expense of workers, the envi-ronment, and poor countries.

Discussion QuestionWhat are some problems with trade barriers? (Sometimes barriers simply do not work.Trade barriers also force consumers to pay higher prices for the sake of protecting inefficientindustries. In general, the total cost of trade barriers is higher than the benefits gained.)

III. Financing Trade (pages 569–570)

A. Different nations have different currencies. To buy something in, say, Mexico, youwould have to exchange your dollars for Mexican pesos. The exchange rate is theprice of one nation’s currency in terms of another country’s currency.

B. Most nations use a flexible exchange rate system, which allows supply and demand to set the price of various currencies. Thus, a currency’s price may change each day.

C. The balance of trade is the difference between the value of a nation’s exports and itsimports. If a nation’s currency depreciates, or becomes weak, the nation will likelyexport more goods because its products will become cheaper for other nations to buy.If its currency appreciates, or becomes strong, exports will decline.

D. A country has a trade deficit whenever the value of the products it imports exceedsthe value of the products it exports. It has a trade surplus whenever the value of itsexports exceeds the value of its imports.

E. The large trade deficit in the United States in the 1990s flooded the foreign exchangemarket with dollars, causing the dollar to lose value. The weaker dollar caused unem-ployment in import industries as imports became more expensive. It caused increasedemployment in export industries as the price of these goods declined.

F. Eventually, under flexible exchange rates, trade deficits tend to automatically correct themselves through the price system.

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Discussion QuestionSuppose you were traveling to Mexico. You went to a bank to get $50 worth ofpesos to spend on your trip. What determines how many pesos you would get foryour dollars? (The exchange rate at the time determines the number of pesos you wouldreceive in exchange for dollars. Under a flexible exchange rate system, the rates change con-stantly as the forces of supply and demand work to set the price of various currencies.)

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I. Market Economies (pages 572–574)

A. The way a society answers the basic economic questions of what to produce, how to produce, and for whom to produce determines its economic system. In a puremarket economy, also called capitalism, these decisions are made in free marketsby the interaction of supply and demand.

B. In a market economy, private citizens—not the government—own the factors of production: natural resources, capital, labor, and entrepreneurship.

C. Driven by the desire to earn a profit, businesses make their own decisions regardingwhat to produce, how to produce, and for whom to produce. At the same time, consumers make their own decisions about what to buy.

D. Supply and demand interact in the market to set prices, and producers and consumersbase their decisions on price.

E. A market economy is decentralized—decisions are made by all the people, not just afew. No one coordinates these decisions.

F. In the United States, the government plays several important roles in the economy. Itprovides public goods. It regulates businesses to make sure markets stay competitive.It works to reduce negative externalities and increase positive externalities.

G. Dividing GDP by a country’s population yields the country’s per capita GDP. Byexpressing GDP in terms of each person, we can compare one nation’s economic suc-cess to another without regard to the size of the two economies. Most countries withhigh per capita GDPs have market economies.

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Economic Systems (pages 572–575)

Did You Know? Although no country practices pure social-ism, many have adopted some socialist ideas. For example, mostindustrialized countries have welfare programs to provide for theneedy in their society. In rural Israel, many communities operateas a “kibbutz.” In a kibbutz, individuals do not own property. Allproperty belongs to the kibbutz. Members work to produce theproducts of the kibbutz. Instead of wages, members receive goodsand services, such as food, health care, housing, and education.

Discussion QuestionWhy does a market economy seem to run by itself? (In a market economy, economicdecisions are made by everyone, not by just a few. The economy seems to run by itself becauseno one coordinates these decisions. Individuals and businesses make their own economic deci-sions based on prices set by the forces of supply and demand.)

II. Command Economies (pages 574–575)

A. In a pure command economy, the central government makes the major economicdecisions. Individuals have few choices and little influence over the economy. Thissystem has also been called a controlled economy, socialism, or communism.

B. Socialism is the belief that the means of production should be owned and controlledby society, either directly or through the government. In this way, socialists felt thatwealth would be distributed equally among all citizens.

C. Karl Marx, a German thinker, was a socialist. He believed that industrialized nationswere divided into capitalists, or the bourgeoisie, who own the means of production,and workers, or the proletariat, who work to produce the goods. Marx saw history as a class struggle in which the workers would eventually overthrow the capitalists.

D. Marx believed that in time, socialism would develop into communism. Under communism one class would evolve, property would all be held in common, andthere would be no need for government.

E. In a command economy, the government owns most productive resources, especiallyland and capital. The government makes the three basic economic decisions. It tellsproducers what to produce, how to produce, and for whom to produce. The govern-ment fixes the wages of workers and sets prices.

F. Government planning agencies control different parts of the economy, such as agriculture and steel production.

G. Command economies can be very inefficient, resulting in slower growth and lowerper capita GDPs than market economies. The two leading command economies areCuba and North Korea.

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Discussion QuestionIn the early 1800s, what group of people wanted to eliminate capitalism? Why?(Socialists wanted to eliminate capitalism because they believed that capitalism was responsi-ble for the misery of workers. They believed that the means of production should be ownedand controlled by society, either directly or through the government. In this way, socialists feltthat wealth would be distributed equally among all citizens.)

III. Mixed Economies (page 575)

A. A mixed economy combines basic elements of a pure market economy and a command economy. Most countries have a mixed economy that combines privateownership of property and individual decision making with government interventionand regulations.

B. In the United States, individuals make decisions based on market phenomena.However, the governments make laws to protect private property and regulate areasof business.

Discussion QuestionWhat is “mixed” in a mixed economy? (A mixed economy combines, or “mixes,” elements of a pure market economy, such as individual decision making based on marketforces, with elements of a command economy, such as government regulation.)

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I. The Transition From a Command Economy (pages 576–578)

A. Today, many nations are changing from one type of economy to another. Some aremoving from traditional economies to more developed ones. Others are shifting fromcommand to market economies.

B. Command economies were unable to achieve the economic growth that marketeconomies had. By 1991, all were moving toward market economies. In EasternEurope, the countries moved toward greater democracy as well.

C. In the Soviet Union, a central planning body called the Gosplan answered the basicproduction questions. It planned the production and distribution of thousands ofproducts. Often it made mistakes. Too much or too little of a good might be produced.Supplies might not arrive where needed. The process became too complicated.

D. The Soviet Union broke into separate countries in 1991 because Communist leaderscould not keep the economy going. Russia’s leaders wanted to convert to a marketeconomy. State-owned factories had to be switched to private ownership. Stock markets had to be created. People had to learn how to let the forces of supply anddemand work.

E. Russia’s transition has been difficult and will probably continue for many years.

F. By the 1980s, China’s command economy was falling behind the market economiesof its neighbors. China began introducing market reforms to catch up. It convertedmany factories to private ownership and set up stock markets.

G. The transition has had some success. China’s economy has grown at a high rate overthe past 20 years. Still, millions of Chinese are unemployed and farmers are finding it hard to compete with cheaper food from abroad.

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Economies in Transition (pages 576–580)

Did You Know? Poland’s command economy was close tocollapse in 1989. In free elections, the Poles swept theCommunist Party from power. The new leaders ignored advice tomove slowly toward a market economy. On January 1, 1990, aday that became known as the “big bang,” the new leaders set inmotion far-reaching economic reforms. Almost overnight, thesereforms transformed Poland to a market economy. The economygrew rapidly and jobs opened. Today, Poland’s economy is thestrongest in Central Europe. Poland’s story is unusual, however.For most former Communist countries, such as Russia, the transi-tion to capitalism has been a slow, difficult struggle.

Discussion QuestionWhat kinds of things went wrong in Russia’s command economy? (The Gosplan, the central planning body, made millions of decisions to get thousands of individual productsmade and shipped to stores. The process got very complicated and many mistakes were made.Supplies did not arrive on time, too much or too little of a good was produced, and goodswere not always delivered to the place that needed them most.)

II. Developing Countries (pages 578–580)

A. Developing countries are countries whose average per capita income is only a fraction of that in more industrialized countries. Many are trying to change to a market economy.

B. Most countries trying to make this change have traditional economies, in whicheconomic decisions of what, how, and for whom to produce are based on custom orhabit. The way of life is passed down from generation to generation.

C. Developing countries are poor and have a high rate of population growth. When population grows faster than GDP, per capita GDP declines. Each person has a smallershare of what the economy produces.

D. Many developing nations are landlocked and do not have access to ocean traderoutes. Others lack natural resources.

E. In many developing countries, civil wars destroyed roads, bridges, factories, and otherresources. They also left many workers dead. Farming is dangerous because of unex-ploded land mines left in the countryside.

F. Some developing countries borrowed large sums of money to spur economic growth.Now they owe more money than the GDP they produce in a year. Many cannot payeven the interest on the debt.

G. Corruption in government delays development of some economies.

H. The International Monetary Fund (IMF) offers advice and financial assistance onmonetary and fiscal policy. It might help a developing country keep the value of itscurrency stable.

I. The World Bank gives loans and advice. For example, one program worked toimprove inland water transportation in Bangladesh.

J. Many developing countries are unable to repay their debts to the IMF and WorldBank. In 1999, leaders in several industrialized nations proposed a plan to cancel alarge portion of this debt. This would leave more funds available for social programsand economic growth plans for developing nations.

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Discussion QuestionWhat are some obstacles to economic growth that developing countries face?(Obstacles include poverty, high population growth rates, lack of natural resources and accessto ocean trade routes, the effects of civil war, severe debt, and corruption in government.)

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I. Authoritarian Government (pages 588–590)

A. No two governments are alike. They are shaped by their country’s unique history, cul-ture, politics, and economy.

B. Governments may be grouped into two broad categories: democratic and authoritari-an. In authoritarian regimes, power is held by an individual or group notaccountable to the people. An oligarchy is an example of this.

C. A monarchy is a government with a hereditary ruler. Absolute monarchs haveunlimited authority to do as they wish. Today, many countries have monarchs butalmost none are “absolute.”

D. Dictators also exercise complete control but usually take power by force. Most relyon the police and military to stay in power. They often tamper with elections orrefuse to hold them. They also limit basic freedoms.

E. The brutal rule of dictator Idi Amin in Uganda left hundreds of thousands dead.Cuba’s Fidel Castro and Libya’s Muammar al-Qaddhafi still hold power.

F. Most dictators impose totalitarian rule, in which the government controls almost allaspects of people’s lives. Totalitarian leaders typically have a master plan for the econ-omy and society. They ban political opposition, suppress individual freedom, anddictate what people should believe. To enforce their rules, they control the media anduse scare tactics and violence.

G. Adolf Hitler in Germany and Joseph Stalin in the Soviet Union were totalitarian lead-ers. Today, China, Cuba, and North Korea are usually considered totalitarian states.

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Types of Government (pages 588–593)

Did You Know? Before the war on terrorism ousted them,the Taliban ruled Afghanistan as a totalitarian state. The Talibanare a group of Muslims with extreme religious views. Much oftheir harsh treatment fell on women. Under Taliban rule, womenwere not allowed to leave their homes without a male relative toaccompany them. When they did go out, they had to wear a“burqa,” a veil that completely covered their faces. Girls were notallowed to attend school. Female patients could not be treated atthe main hospitals.

Discussion QuestionHow are a dictator and an absolute monarch alike and how are they different?(Both exercise complete control over the state. However, an absolute monarch inherits theposition. A dictator usually takes power by force or is placed in charge in a time of crisis.)

II. Democratic Governments (pages 590–593)

A. Almost all monarchies today are constitutional monarchies, in which the power of the hereditary ruler is limited by the country’s constitution and laws. These govern-ments generally follow democratic practices.

B. The people participate in governing and elect officials to make laws. The monarchserves as the ceremonial head of state and national symbol of unity.

C. A republic is a democracy with a representative government in which no leadersinherit office. It is also called a representative democracy or a constitutional republic.The United States was the first republic, but now there are many more.

D. Democracy has been spreading. Nearly two-thirds of the world’s countries now havedemocratic governments. All are representative democracies, though they vary inhow they elect leaders and organize government.

E. Few democracies use a presidential system. Most follow Great Britain’s model and usea parliamentary system. The legislature is usually called a parliament and the headof government, a prime minister, though the terminology can vary.

F. In a parliamentary system, top officials perform both executive and legislative func-tions. Prime ministers and their cabinet ministers are members of parliament, so theyhelp make the laws as well as carry them out. In a presidential system, the executiveand legislative branches operate independently.

G. In a presidential system, voters elect the president directly. In a parliamentary system,members of parliament elect or approve the prime minister.

H. In a presidential system, the president acts as both the head of government (politicalleader) and head of state (ceremonial leader). In parliamentary systems, someoneother than the prime minister (a king, queen, or “president”) serve as head of state.

I. Because a parliamentary system does not separate the legislative and executivebranches, it has fewer checks and balances.

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J. However, the unity among branches helps the government get things done. Theprime minister is typically from the majority party in the legislature. As a result,the government has fewer party conflicts over laws and policies like those that cause gridlock in the U.S. Congress.

K. Governments evolve as times change and people with new agendas come to power.

Discussion QuestionWhat often causes “gridlock” in the U.S. Congress, and how does a parliamentarysystem reduce this problem? (In the United States, the presidency and Congress may becontrolled by different parties. Disagreements along party lines often lead to “gridlock” thatstalls political action. Under a parliamentary system, the chief executive typically comes fromthe majority party in the legislature. As a result, serious conflicts rarely erupt over laws, policies, and appointments.)

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I. A Parliamentary Democracy (pages 595–597)

A. Great Britain, or the United Kingdom, is an island nation that includes England,Scotland, Wales, and Northern Ireland. It is small in area but has the third-largestpopulation in Europe.

B. Our nation began as 13 English colonies. As a result, we share a common language,history, and culture with Great Britain. However, our governments are very different.

C. Britain is a constitutional monarchy. Today, Queen Elizabeth II serves a ceremonialand symbolic role. The real power rests with the elected Parliament.

D. Britain’s constitution is not a single document. It is a collection of written and unwrit-ten guides to the law. They include the Magna Carta and Bill of Rights as well as thewhole body of British laws, court decisions, and traditions.

E. Britain developed the parliamentary system. Most of its former colonies patternedtheir governments after Britain’s.

F. The British Parliament is divided into the House of Commons and the House of Lords.The members of the Commons are the main lawmakers. They are elected directly byvoters in their districts.

G. Most bills are introduced in the Commons by the majority party. Members debate billsand send them to standing committees to work out details. Committees must submitevery bill to the Commons for a vote. A majority vote passes a law.

H. The House of Lords has little power. Most members are “life peers” appointed by theprime minister as a reward. A few are nobles with inherited titles. This body debatesbills and can delay passage, but cannot block passage by the Commons.

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A Profile of Great Britain (pages 595–598)

Did You Know? As Britain’s head of state, Queen ElizabethII performs many ceremonial duties, such as officially openingParliament each year and holding audiences with important visi-tors. The queen regularly goes on “walkabouts,” visiting countriesand meeting people all over the world. Her visits help to celebratelocal achievements, strengthen friendships among nations, andpromote charities. Colorful pageantry accompanies her wherevershe goes. Canada, Australia, and New Zealand, countries thatwere once under British rule, still recognize the British queen astheir official head of state.

I. Britain’s main parties are the Conservatives and Labour. Like our Republican Party,the Conservative Party supports private enterprise and minimal government interven-tion, and attracts upper-class voters. Like our Democratic Party, the Labour Partyfavors a more active role for government and attracts working-class voters.

J. The party that wins the most seats in the House of Commons selects the prime minister. Tony Blair, leader of the Labour Party, became prime minister in 1997.

K. No limits are set on how long elected officials may serve. Parliamentary electionsmust be held at least every five years, but no fixed dates are set. The prime ministerusually calls for elections when his or her party has strong support.

L. England and Wales, Northern Ireland, and Scotland have their own separate legal systems. Different courts hear civil cases and criminal cases. A committee of theHouse of Lords is the highest court of appeal. British judges are appointed for life.

Discussion QuestionCompare the British judicial system to the U.S. judicial system. (As in the UnitedStates, civil cases and criminal cases are heard in separate British courts. A committee of theHouse of Lords is the highest court of appeal, like the U.S. Supreme Court. Like our federaljudges, British judges are appointed for life terms to free them from political pressure.)

II. Regional Governments (pages 597–598)

A. Until recently, Great Britain had a unitary system in which power is centralized.Most political decisions were made in London, the capital. Local governments mostlyprovided services paid for with central funds.

B. In the late 1900s, Britain began a policy of devolution—transferring power to localauthorities. Elected assemblies in Scotland, Wales, and Northern Ireland now governregional matters. The people from those regions still elect members to Parliament.

C. In Northern Ireland, many Catholics oppose the Protestant majority and seek inde-pendence from Britain. Violence between the two groups continues to plagueNorthern Ireland.

D. At one time, the British empire included nearly one-fifth of the world. Today, theempire is gone, but Britain remains a key player on the world stage.

E. Britain has the fourth-largest economy in the world and London is a leading financial center. Britain is also one of our closest allies.

F. Britain also belongs to the European Union, whose 15 members cooperate in economics and trade, social and foreign policy, security, and justice. So far, Britain has not switched to the euro, but may do so in the future.

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Discussion QuestionHow was Britain’s unitary system of government different from our system? (TheUnited States has a federal system, in which power is shared by the states and the nationalgovernment. Under its unitary system, Britain centralized power in London. Until Britainbegan its policy of devolution, the role of local governments was chiefly to provide servicespaid for with central funds.)

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I. China in History (pages 599–602)

A. China has the largest population and third-largest land area of any country in theworld. China is a huge potential market, and its exports make it a valuable tradingpartner. Still, China’s military strength and communist ideology keep us watchful.

B. For centuries, China was ruled by a series of dynasties—families that hold power for generations. The last dynasty began to crumble in the late 1800s.

C. China became a republic in 1912, but a stable government did not emerge until theKuomintang, or Nationalist Party, took control in the late 1920s.

D. By 1949, the Chinese Communist Party (CCP), led by Mao Zedong, took control. The Kuomintang fled to Taiwan, an island off the Chinese coast. There they set up a separate government and a capitalist economy.

E. Mao Zedong proclaimed the founding of the People’s Republic of China, with its capital in Beijing. He ruled for nearly 30 years.

F. The CCP wanted to turn China into a socialist state. It seized farmland and redistrib-uted it among the peasants. Some land was combined into collective farms, workedjointly by groups of peasants under government supervision. The government tookcontrol of all major industries and assigned jobs to workers.

G. Mao’s government executed more than a million political opponents in its first year. It limited freedom of expression and banned organized religion. Young people weretaught unquestioning loyalty to the Communist Party.

H. In the 1970s, with economic development lagging, the CCP began to loosen centralcontrol over industry and agriculture, and permit some free enterprise.

I. After Mao’s death in 1976, Deng Xiaoping, the new leader, welcomed foreign trade and investment. China became more open to the rest of the world, but not to democracy. In 1989, the military killed hundreds of unarmed Chinese studentsdemonstrating for democracy in Tiananmen Square.

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A Profile of China (pages 599–604)

Did You Know? Begun about 22 centuries ago, the GreatWall of China was constructed entirely by hand. It was actually a series of walls that were built and rebuilt by different rulers toprotect China from invading tribes from the north. At its peak, thewall held thousands of forts and towers guarded by millions ofmen. On top of the wall, the guards built fires that producedthick black smoke. One column of smoke meant that a force ofless than 500 was attacking. Four columns meant the attackersnumbered as many as 10,000.

J. Private enterprise and foreign investment are expanding in China, yet the govern-ment remains heavily involved in directing the economy.

K. The government still regulates many aspects of private life, but less than in the past.The people now have religious freedom.

L. China’s constitution recognizes human rights—the fundamental rights that belong toevery person on Earth. Still, anyone the government views as a threat may be beaten,locked in prison or a mental institution, or shipped to a labor camp.

Discussion QuestionHow has China been changing in recent years? (China has become more open to tradeand foreign investment. Economic reforms are continuing. Private enterprise and foreigninvestment are expanding. The government intrudes less into people’s personal lives than inthe past, and religious freedom is now allowed.)

II. The Structure of Government (pages 602–604)

A. The Chinese Communist Party is the dominant force in government. At the center isthe secretary general of the CCP, Jiang Zemin.

B. The premier, currently Zhu Rongji, heads the State Council, which is China’s execu-tive body. The Council implements party policies and runs the government throughits various ministries—for defense, education, health, and so forth.

C. The provinces elect the members of the National People’s Congress. This group is sup-posed to be the highest governing body, but it meets only about two weeks a year andhas little real power.

D. Instead, the Politburo, a group of about 20 party leaders, makes national policy. Thetop seven of these leaders serve on the Politburo Standing Committee, which master-minds China’s political, economic, and social policy.

E. China has a unitary system. The central government makes decisions for the entirecountry. Each province has a governor, and power trickles down to other layers.

F. The judicial system is not independent of the Communist Party. Police can gather evidence with no search warrants. Lawyers cannot cite legal precedents to supporttheir cases. Judges are often corrupt or inept.

G. Recent reforms now require legal training for judges. New rules are making trials fairer.Now accused persons are allowed to see a lawyer and are assumed innocent untilproven guilty.

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H. The United States cut off diplomatic ties with China when Mao took power. Our offi-cial contacts were with the Nationalists in Taiwan. Relations warmed, however, afterPresident Richard Nixon visited China in 1972.

I. Today China and the United States trade and engage in cultural, educational, and sci-entific exchanges. Relations are still strained at times, especially over human rights.

Discussion QuestionDescribe China’s State Council. (The premier heads the State Council, which is China’sexecutive body. The Council implements party policies and handles the day-to-day running ofgovernment. China’s various ministries—for defense, education, health, and so forth—all fallunder the authority of the State Council.)

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I. Global Interdependence (pages 610–612)

A. Global interdependence means that people and nations worldwide depend on oneanother for many goods and services. It also means that what happens in one nationor region affects what happens in others.

B. The United States must import half the oil we use, so we must maintain good relations with oil-producing countries. The United States also imports many of theminerals needed for industry, such as manganese, bauxite, and tin.

C. Other countries depend on the United States for computers, aircraft, and other high-tech products. Poorer countries look to the United States for food, medicine, and arms.

D. Trade includes both competition to sell products and cooperation to make trade bene-ficial to everyone.

E. World markets offer profit opportunities for businesses and lower prices and widervariety for consumers. However, global competition can force weak companies out ofbusiness, hurting some national economies and costing workers their jobs.

F. Protectionism is a nation’s policy to protect its industries from foreign competitionby imposing tariffs. This policy can harm other economies. It may cause price increas-es and trade wars, in which nations set up ever greater trade barriers.

G. Many countries now support free trade. NAFTA will gradually abolish all trade barri-ers between the United States, Mexico, and Canada. The WTO will work to reducetariffs and eliminate quotas among more than 150 nations.

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Global Developments (pages 610–615)

Did You Know? In 1997, the Clinton administration joinedthe European Union nations and Japan in signing the Kyototreaty. The leaders of these developed nations agreed to reducethe amount of harmful gases their nation’s industries releasedinto the air. The treaty was intended to combat global warming.In 2001, President George W. Bush announced that the UnitedStates would not honor the treaty. The other world leaders reactedangrily. They pointed out that the United States produces 25 per-cent of the polluting gases. No treaty to reduce these gases couldsucceed without United States support. Bush argued that the treatywould put too heavy a burden on the United States economy.

Discussion QuestionWhat are some disadvantages of protectionism? (Protectionism often harms theeconomies of other nations and the world. It may cause price increases and lead to tradewars, in which nations set up ever greater trade barriers. Trade wars can create serious tensions between nations.)

II. Global Problems and American Interests (pages 612–615)

A. There is a growing inequality between the rich developed countries and the poor less-developed countries. As this occurs, conflicts grow.

B. Developed countries, such as the United States, Japan, Germany, Canada, Britain, andFrance, have highly developed business and industry. Their citizens are relatively welleducated and healthy. They produce most of the world’s manufactured goods andconsume much of the world’s natural resources, enjoying a high standard of living.

C. Many citizens of less developed nations live in the shadow of death from starvation or disease. These countries are called developing countries because they are trying to develop industrial economies.

D. Some developing nations, such as Chad, Albania, Paraguay, and Uganda, are verypoor. They have few resources and cannot produce enough food to feed their people.They manufacture few products and have high levels of unemployment and disease.

E. Other developing nations have valuable natural resources. Saudi Arabia and Iraq haveoil. Colombia grows coffee. They have little industry, though, and lack the health andeducational facilities to develop their human resources.

F. Most developed nations are located in the Northern Hemisphere. Most developingnations are in the Southern Hemisphere. This is called the “North-South conflict.”

G. Developed and developing nations need each other. Richer nations sell products toand obtain raw materials from poorer nations. Poorer nations need food, technology,and money from richer nations.

H. Many industrial nations try to help developing nations. They give financial and tech-nical aid. Businesses build factories in poor countries, providing jobs and training.Citizens volunteer to teach skills and modern methods of farming.

I. Foreign aid poses questions. Should the United States increase aid, or encourage poor-er countries to get help from private investors? Should we favor nations that supportour policies? Should we give less foreign aid and spend more on problems at home?

J. Destruction of the environment is another global problem. Industries and vehiclesrelease poisonous metals into the air and water. Oil spills pollute the oceans andbeaches, killing sea birds and fish.

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K. Coal-burning factories release sulfur dioxide gas into the air, where it mixes withwater vapor and later falls to the earth as acid rain. Acid rain created with gasesfrom U.S. factories falls in Canada, damaging forests and killing fish in lakes.

L. The world must work together to save the environment. One way is conservation—limiting the use of polluting resources. Conserving gasoline cuts polluting gases.Conserving forests protects wildlife and leaves more trees to absorb carbon dioxide.

M. Some opponents argue that conservation slows economic growth. Supporters arguethat not conserving may provide short-term gains but long-term problems.

N. Poor nations believe antipollution regulations unfairly slow their economic growth.Developed nations polluted freely while becoming rich, but now won’t allow poornations to do the same.

Discussion QuestionWhy do poor countries need improved health and educational facilities to helpthem develop? (Poor countries have little industry. They need scientists, engineers, bankers,and business leaders to develop industry. But to develop these human resources, they needbetter health and educational facilities.)

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I. The Purpose of the United Nations (pages 617–620)

A. Internationalism is the idea that nations should cooperate to promote commonaims. They do this through membership in an organization made up of many nations.

B. The League of Nations was formed after World War I. The United States refused tojoin, fearing entanglement in foreign conflicts. Without American support, the Leaguewas too weak to prevent World War II.

C. In 1944, delegates from the United States, Britain, and the Soviet Union drafted acharter for the United Nations. In 1945, representatives of 50 countries signed thecharter.

D. The UN’s main purposes are to maintain international peace, develop friendly rela-tions among nations, promote justice and cooperation, and seek solutions to globalproblems.

E. The UN now has 189 members. Its main headquarters is in New York City.

F. All UN members belong to the General Assembly. The assembly meets regularlyto debate international issues. Decisions are made by majority vote.

G. The Security Council is the UN’s peacekeeping arm. It has five permanent members—the United States, Britain, Russia, France, and China. It also has 10 nonpermanent members elected by the General Assembly for two-year terms.

H. Decisions require nine “yes” votes. However, any permanent member can veto, or reject, any motion, blocking actions it opposes.

I. The Security Council meets regularly and holds emergency sessions to handle crises. It tries to help nations solve problems peacefully. It can also send UN troops, drawnfrom various nations, to prevent or stop a war.

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The United Nations (pages 617–621)

Did You Know? The seven men who have served as secretary-general of the United Nations reflect the diversity of the world community. The first three came from Norway, Sweden,and Burma (now Myanmar). The next three came from Austria,Peru, and Egypt. After his election in 1997, Kofi Annan of Ghanabecame the first secretary-general from Africa south of theEquator. Annan studied economics at a university in Geneva,Switzerland, and earned a master’s degree in management fromMIT in the United States. He can speak French, English, and several African languages.

J. The Secretariat carries out the day-to-day business, led by the secretary-general,the UN’s chief executive officer. The General Assembly appoints the secretary-generalto a five-year term, with a two-term limit.

K. The International Court of Justice, or World Court, is the UN’s judicial arm, headquartered in The Hague, the Netherlands. Its 15 justices hear disputes betweennations. It has no power to enforce its rulings and must rely on cooperation fromnations.

L. The Economics and Social Council promotes a higher standard of living around the world, including improvements in health, education, and human rights.

M. By 1994, the Trustee Council had helped 11 territories become either independentnations or part of other nations. Then it ceased operations.

N. The World Health Organization works to improve the level of health across the globe.

O. UNICEF helps needy children in developing countries get the care they need. It alsoencourages families to educate girls as well as boys, tries to reduce childhood deathand illness, and works to protect children caught in war and natural disasters.

P. The World Bank makes loans to developing countries at low interest rates.

Q. The International Monetary Fund provides financial and technical assistance, especially to promote economic growth in developing countries.

Discussion QuestionIdentify some world problems that UN agencies target. How do they try to combatthese problems? (In general, these agencies try to combat hunger, disease, poverty, igno-rance, and other problems by providing poor nations with money and expert assistance inhealth, industrial development, agriculture, education, and other fields.)

II. Recent Activities of the United Nations (pages 620–621)

A. The UN has helped settle wars and relieve sickness, poverty, and ignorance. However,lack of cooperation among permanent members has reduced its effectiveness.

B. When Iraq invaded Kuwait in 1990, the Security Council placed trade sanctions onIraq and set a deadline for Iraq to withdraw from Kuwait. When the deadline passed,UN troops, led by the United States, defeated Iraq in the Persian Gulf War.

C. The UN has sent peacekeeping troops to oversee elections in Cambodia and aid starv-ing people in Somalia. It carried out peacekeeping operations in Bosnia-Herzegovina,Kosovo, East Timor, and other places. It sent inspectors to try to stop Iraq from devel-oping weapons of mass destruction.

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D. Globalization involves individuals and nations working internationally across barri-ers of distance, culture, and technology. Secretary-General Kofi Annan of Ghana seesglobalization as an engine to help lift people out of misery.

E. In 1992, the Earth Summit brought together representatives from 178 nations to dis-cuss ways to protect the environment. Leaders signed treaties pledging to safeguardwildlife and limit pollution that causes global warming.

F. Multinationals are firms that do business or have offices or factories in many coun-tries. At the World Economic Forum in 1999, the UN proposed a “Global Compact”that would call upon leaders of multinationals to respect human rights and contributeto a fairer distribution of wealth throughout the world.

Discussion QuestionWhat are some ways in which the UN has been successful? (The UN has served as a meeting place where nations can discuss mutual problems. It has been able to settle somewars and has done much to fight sickness, poverty, and ignorance. UN forces have overseenelections, provided aid to starving people, and carried out peacekeeping operations in manyregions.)

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I. Standards for Human Rights (pages 622–624)

A. Human rights are basic rights that all people should enjoy, including the right to safety, food, and shelter. These rights lie at the heart of the United States political system. Yet many governments still imprison and abuse people for speaking theirminds. Others have been charged with sponsoring terrorist acts outside their borders.

B. In 1948, the UN adopted the Universal Declaration of Human Rights. It proclaims that “all human beings are born equal in dignity and rights.” Articles 3 to 21 list manyrights protected in the U.S. Constitution plus others, such as freedom of movement,right to seek asylum, right to a nationality, right to marry, and right to own property.

C. Articles 22 to 27 spell out economic, social, and civil rights, including the right tosocial security, right to work, right to an adequate standard of living, and right to education. Articles 28 to 30 state that all people should be free to enjoy these rights.

D. The UN High Commissioner for Human Rights oversees UN’s human rights programs.The commission reports rights violations, hoping that drawing attention to theseabuses will bring pressure to halt them.

E. The UN has established international tribunals to hear cases about violations ofinternational human rights law. Several military leaders and government officialshave been found guilty and punished.

F. In 1994, the Hutu-led Rwandan government battled Tutsi-led guerrillas. In a genocide, or deliberate killing of a racial or cultural group, Hutu forces killed more than 500,000 people. The International Criminal Tribunal Court for Rwanda began to bring to justice people accused of participating in the genocide.

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Democracy and Human Rights (pages 622–627)

Did You Know? A group of military officers seized power in Argentina in 1976, and began to wipe out their opponents.Thousands of people vanished without a trace. Often taken fromtheir homes at night, these people joined the growing ranks ofthe desaparecidos, the “disappeared.” In 1977, in an act ofextreme courage, a group of women began marching in front ofthe presidential palace every Thursday, demanding to know whathappened to their loved ones. Dressed in black, they wore whitehandkerchiefs bearing the names of their disappeared sons anddaughters and carried their pictures on signs. These womenbecame known as “The Mothers of the Plaza de Mayo.” Severaldisappeared themselves, including their founder, Azucena Villaflorde Vicenti.

Discussion QuestionHow does the UN High Commission for Human Rights work to halt human rightsabuses? (The commission reports rights violations in all parts of the world. By drawingattention to these abuses, it hopes to bring pressure to halt them.)

II. Spread of Democracy and Liberty (pages 624–627)

A. Early in the twentieth century, about 12 percent of the world’s people lived in ademocracy. By 2001 democracy had spread to nearly 60 percent of the world’s peoplein 120 countries.

B. To qualify as a democracy, a political system must at least allow the people to choosetheir leaders freely from among competing groups and individuals not chosen by thegovernment.

C. The 86 countries considered “fully free” democracies go beyond this standard. Theyoffer a broad range of human rights, such as those stated in the Universal Declaration.

D. Of the 58 “partly free” countries, 34 met the minimal standard by holding free andfair elections. The other 24 did not meet this minimal standard.

E. In the 48 countries considered not free, the governments often practiced or permittedterrible violations of human rights.

F. White leaders of South Africa legalized a policy of racial separation between blacksand whites called apartheid. Blacks could not vote or own property. They could bejailed indefinitely without cause.

G. The United States and European countries ordered economic sanctions, or coercivemeasures, against South Africa. U.S. businesses began to withdraw investments.Pressures from foreign countries and the anti-apartheid movement brought a gradualend to apartheid.

H. Nelson Mandela, imprisoned in 1962 on charges of treason, had become a symbol ofthe struggle for freedom in South Africa. In 1994, South Africa held its first electionopen to all races, electing Mandela as the first black president.

I. The Taliban, a strict Islamic group that ruled Afghanistan, abused the human rights of women and others. In 2001 the United States accused the Taliban of supportingterrorists and bombed Taliban forces. Since the collapse of the Taliban government,the UN has been working with the new leaders to create a climate that protectshuman rights.

J. During most of the twentieth century, spreading democracy was a main goal of theU.S. government.

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K. After World War II, the Soviet Union forced the countries of Eastern Europe tobecome Soviet satellites—countries dominated or controlled by another more pow-erful country. The Soviets appeared bent on expanding their power and influence.

L. Soon the world divided into two hostile camps—free nations of the West andCommunist nations. The struggle between these two sides became known as the Cold War because it involved the clash of ideas more than a clash of arms.

M. After the collapse of Soviet totalitarianism, the United States promoted democracy in the former Soviet Union and other countries once dominated by the Soviet Union.

N. In response to the September 11, 2001 terrorist attacks, President George W. Bushrepeated America’s commitment to democracy around the world.

O. Peace, prosperity, and national security have a better chance of taking hold in a free and democratic world.

Discussion QuestionSuppose a country’s political system allowed free elections. The people couldchoose among competing candidates chosen by the government. Would this nationbe a democracy? (No. To be a democracy, the political system must allow the people tochoose their leaders freely from among competing groups and individuals who were not chosen by the government.)

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