Econ Ch13 Government And The Economy

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Econ Ch13 Government And The Economy

  1. 1. Chapter Government and the Economy 13
  2. 2. Objectives: <ul><li>Identify the three basic aspects of governmental spending </li></ul><ul><li>Describe the basic principles of taxation </li></ul><ul><li>Differentiate between progressive, regressive, and proportional taxes </li></ul><ul><li>Explain how the national budget is formulated </li></ul><ul><li>Define budget deficits and surpluses </li></ul>
  3. 3. Recall: Chapter 11 <ul><li>Negative Externalities </li></ul><ul><li>Public Goods </li></ul><ul><li>Government Regulation </li></ul><ul><li>Standards </li></ul>
  4. 4. Government Spending <ul><li>Civics Connection: </li></ul><ul><li>3 levels of government: </li></ul><ul><ul><li>local, state, federal </li></ul></ul><ul><li>Basic Aspects </li></ul><ul><li>Major consumer of goods and services </li></ul><ul><li>Transfer Payments </li></ul><ul><li>Interest Payments </li></ul>
  5. 6. Interest Payments <ul><li>Government Bonds: </li></ul><ul><ul><li>Loans the government owes </li></ul></ul><ul><ul><li>Interest rates </li></ul></ul>
  6. 7. Justification for Taxes <ul><li>What does the government spend taxes on? </li></ul><ul><li>The principle of benefits </li></ul><ul><li>received : Gas Tax </li></ul><ul><li>The principle of ability </li></ul><ul><li>to pay : Welfare </li></ul><ul><li>Taxes should be : </li></ul><ul><ul><li>broad </li></ul></ul><ul><ul><li>simple </li></ul></ul><ul><ul><li>Fair </li></ul></ul><ul><ul><li>Ex: Income Tax? </li></ul></ul>
  7. 8. Types of Taxes <ul><li>Progressive </li></ul><ul><li>Regressive </li></ul><ul><li>Proportional </li></ul><ul><li>Excise </li></ul><ul><li>Income </li></ul><ul><li>Sales </li></ul><ul><li>Property </li></ul><ul><li>Social Security </li></ul>
  8. 10. The National Budget <ul><li>Mandatory Spending </li></ul><ul><li>Discretionary Spending </li></ul><ul><ul><li>Defense </li></ul></ul><ul><ul><li>International </li></ul></ul><ul><ul><li>Domestic </li></ul></ul><ul><ul><li>Government Salaries </li></ul></ul><ul><li>Fiscal Year </li></ul><ul><ul><li>October 1-September 30 </li></ul></ul>
  9. 12. The National Deficit <ul><li>Deficits=shortages </li></ul><ul><li>Surpluses </li></ul><ul><li>National Debt </li></ul>
  10. 14. <ul><li>I’m all out of credit on my card. </li></ul><ul><li>Can you raise the limit? </li></ul><ul><li>I’ll pay you back, I swear! </li></ul>

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