Role of Government
This is when the government provides things like roads, schools, and the military.
Public goods
This includes the army, navy, and national defense.
military spending
The biggest source of government money.
taxes
The plan for how the government spends and collects money.
the budget
Money must be easy to carry.
portability
This role involves collecting taxes and giving benefits like Social Security.
redistribution of income
Programs like Medicare and Medicaid fall under this category.
healthcare spending
Tax taken from your paycheck for Social Security and Medicare.
payroll tax
When the government spends more than it earns.
a deficit
Money must last a long time without breaking down
durability
This type of economy mixes government involvement with free markets.
mixed economy
Money given to retired or disabled citizens.
Social Security
Taxes paid by businesses on profits.
corporate tax
When the government earns more than it spends.
a surplus
Money must be easily divided into smaller amounts
divisibility
This is when the government sets rules for businesses to protect consumers.
regulation
This includes roads, bridges, and public transportation.
infrastructure
Taxes on goods like gas, tobacco, and alcohol.
excise taxes
This policy involves changing taxes and spending
fiscal policy
Money must be widely accepted
acceptability
Government involvement helps stabilize the economy during recessions and inflation.
economic stabilization
Money the government must pay on borrowed funds.
interest on debt
When the government borrows money to cover deficits.
borrowing
The process of deciding how much money goes to different programs.
budgeting/allocation
Money must have a consistent value
stability