Government Roles
This role means the government provides things like roads and schools.
Provider
This tax is based on how much money you earn.
Income tax
This happens when the market does not work well on its own.
Market Failure
This is the lowest legal wage a worker can be paid
Minimum Wage
The government builds a highway everyone can use.
Public Good
This role includes making laws and enforcing them.
Protector
This tax is added when you buy something
Sales tax
These are goods everyone can use and you can’t easily charge for.
Public Goods
This is the highest legal price allowed
Price Ceiling
A factory pollutes the air and harms nearby people.
Negative Externality
This role involves making rules for businesses.
Regulator
This tax is based on the value of your home or land.
Property Tax
Name ONE example of a public good.
national defense / parks / streetlights
This is the lowest legal price allowed.
Price Floor
The government lowers taxes and increases spending during a recession. (expansionary or contractionary?)
expansionary fiscal policy
This role of government focuses on keeping the economy stable (like controlling inflation or unemployment).
Stabilizer
This type of tax takes a bigger percentage from low-income people
Regressive
This is a harmful side effect like pollution
Negative Externality
When a price ceiling is too low, this happens.
Shortage
The government raises taxes to fight inflation (expansionary or contractionary?)
Contractionary
Give ONE reason the government gets involved in the economy.
What is protect consumers / provide public goods / prevent monopolies / reduce inequality?
In this tax system, higher earners pay a higher percentage.
Progressive
This is a helpful side effect like education helping society
Positive Externality
When a price floor is too high, this happens in the job market.
What is surplus of labor (unemployment)
The government gives money to farmers to help them produce more.
Subsidies