CE.13c Government effects the economy

What gives the federal government the right to tax a person's income?

• The 16th Amendment

• The Bill of Rights

• The Declaration of Independence

• The Articles of Confederation

Which is NOT a way the government affects our economy?

• the government raises or lowers taxes

• the government produces more or fewer bitcoins

• the government spends more or less money

• the government borrows more or borrows less money

What would happen if the federal government RAISES taxes?

• The economy will grow rapidly.

• Government revenue will increase.

• Unemployment will decrease.

• Inflation will be controlled.

As the government borrows MORE money, ..........

• there is less money available for businesses and individuals to borrow

• interest rates decrease significantly

• the national debt decreases

• inflation is immediately controlled

If the Defense Department orders a new aircraft carrier to be built at Newport News Shipbuilding, what is true of the economy of Newport News and surrounding areas?

• The economy will likely experience growth due to increased employment and business opportunities.

• The economy will likely decline due to the disruption caused by construction.

• The economy will remain unchanged as the project will not impact local businesses.

• The economy will suffer due to increased taxes to fund the project.

Match the following statements with their outcomes:

• consumers can buy more

• government lower taxes

• government revenue will go down

• government raises taxes

• people have less money to spend

• unemployment goes up

• unemployment goes down in Newport News

• a new submarine is ordered from Newport News shipbuilding

Back to that aircraft carrier, what will also happen as a result of a new aircraft carrier and INCREASED government spending?

• taxes might increase

• taxes might decrease

• the government might borrow money

• the government might borrow less money

What would cause people to spend more money?

• if the government raises taxes

• if the government lowers taxes

• if the government declares war

• if the government fires people

What is an income tax?

• a type of sales tax

• a special type of tax on expensive things that are luxuries such as expensive cars, fur coats and big boats

• a tax on things you sell only

• a tax on money you make

Banks are important to our economy because they:

• provide loans and credit to businesses and individuals

• offer entertainment services

• manufacture goods

• produce agricultural products