# 🏛️ Cheatsheet: Civic Literacy and Media Awareness

By Better Wise

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A lookup card for the whole course. Scan the tables, keep the decision rules, use the routines.

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## Module 1: How Economies and Institutions Work

### 1.1 Who Does What: Governments, Markets, and Institutions

**Mixed economy** = markets (private decisions, prices, competition) + government (rules, public goods, redistribution). Both are always present; the debate is about *degree*, not either/or.

| Actor | Core job | Everyday example |
| --- | --- | --- |
| Markets | Allocate goods via prices and competition | Grocery prices, wages, rent |
| Government | Set rules, fund public goods, redistribute | Roads, courts, defense, safety nets |
| Central bank | Manage money and interest rates | Setting the policy interest rate |
| Institutions | Provide stable, trusted rules and enforcement | Courts, property rights, regulators |

- **Public good:** non-excludable and non-rival (e.g., street lighting, national defense). Markets underprovide these, which is why government funds them.
- **Externality:** a cost or benefit that falls on third parties (pollution, vaccination). A classic reason for rules.
- **Institution quality matters:** clear property rights, enforceable contracts, and independent courts lower uncertainty and support investment.

> **Note:** 
> Ask of any claim: *which actor is doing what, and who bears the cost?* Most "government vs market" arguments are really about a specific trade-off.

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### 1.2 Inflation and Interest Rates in Everyday Life

**Inflation** = sustained rise in the general price level. **Interest rate** = the price of borrowing money (and the reward for saving).