12.3 Students analyze the influence of the federal government on the American economy:

• Section 1. Understand how the role of government in a market economy often includes providing for national defense, addressing environmental concerns, defining and enforcing property rights, attempting to make markets more competitive, and protecting consumers’ rights.

• Section 2. Identify the factors that may cause the costs of government actions to outweigh the benefits.

• Section 3. Describe the aims of government fiscal policies (taxation, borrowing, spending) and their influence on production, employment, and price levels.

• Section 4. Understand the aims and tools of monetary policy and their influence on economic activity (e.g., the Federal Reserve).