1. If government increases the excise tax on tires and the tax is added to the price, describe how we can determine the incidence of the tax between the consumer and the seller 2. What are the three sources of funding for the public sector? Can the government rely on all of these sources in the long run? Explain. 3. What are externalities? Describe how government corrects for positive and negative externalities. 4. Suggest four possible solutions for the problems currently faced by Social Security and how they would resolve the problems. 5. Define the business cycle. Identify the phases of the business cycle and explain what is happening to spending, output and income, employment and prices in each phase. 6. Define Capitalism and identify and explain the characteristics of a capitalist system. 7. What is meant by full employment? Discuss the four types of unemployment?
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