SS8B Unit 5 Exam Review

How can governments use tax revenues to support the economy?

• by paying people who will enforce laws against polluting

• by building roads that are used to make trade possible

• by paying members of Congress for their service

• by preserving lands from any type of business activity

If the government wants to pay down the national debt, in what area might it reduce spending?

• Medicaid

• military

• Social Security

• Medicare

How do the federal taxes used to operate national parks support the national economy?

• Sections of national park land can be opened up to development.

• Businesses pay more for natural resources from national parks.

• Visitors to national parks spend money at local businesses.

• Many visitors to national parks will volunteer to preserve it.

What is an example of a local government expenditure?

• • 
    

    paying the salaries of teachers

• protecting land from development

• building a new interstate highway

• reducing government staff

How do tax incentives for businesses support the economy?

• Businesses could build schools to help educate and train workers.

• Businesses could have more money to invest in hiring more workers

• Businesses could improve the road infrastructure of a region.

• Businesses could invest their extra funds to support a political candidate

What is one way the government regulates the economy to protect consumers?

• • 
    

    Antitrust laws break up corporations that hurt competition

• Business taxes fund government programs.

• Property taxes fund public schools and parks.

• Controlling the money supply keeps inflation down.

What does the Federal Trade Commission (FTC) do to protect consumers?

• enforces antitrust laws to ensure competition

• ensures products are safe for consumers

• protects financial investments of consumers

• tries to lead the economy to create more jobs

Which economic indicator is used to find the inflation rate?

• consumer price index

• standard of living

• gross domestic product

• unemployment rate

How is inflation managed in the United States?

• Congress approves the budget of the government.

• The Federal Reserve increases or decreases the money supply.

• Congress sets price controls on goods and services.

• The Federal Reserve regulates the wage rates of US workers.

How does rising inflation affect lenders?

• • 
    

    It helps lenders because they will make more money in the future with higher inflation.

• It encourages lenders to lend as much as possible, so their money does not lose value.

• It discourages lenders from lending because they would rather lend their money in the future.

• It hurts lenders because they will be paid back with less valuable money in the future.