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PA 4630 – Governmental Budgeting Mid-Term As we have learned, there are many things that require government to have a role on the US economy. Some like Adam Smith have argued for government to have less of a role in the economy, while others, such as John Maynard Keynes, provided a counter perspective. No matter which approach you believe is most beneficial, both include government involvement. Discuss the various factors that influence governments’ role in the economy? In your answer be sure to comprehensively discuss the role of the following:

• Welfare economics & market efficiency • The differences between public & private goods • Externalities & the environment

Finally, we have talked about V.O. Key’s timeless question in which he asked, On what basis shall it be decided to allocate x dollars to activity A instead of activity B? Based upon your answer above, how would you then answer Key’s question for the allocation of resources? Your mid-term should be 4-6 double-spaced pages with 1-inch margins, not including your reference page. Make sure you follow the grading rubric to ensure you have addressed each of the points/prompts required. Your paper is due Wednesday, October 4th by 11:59 PM. No late papers will be accepted.

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