SOL CE.13 - Government and the Economy Study Guide Answers

1. Enforcing antitrust laws, global trade, and helping businesses to start up are all ways the government promotes… Competition 2. Why does the United States government enforce anti-trust laws? Prevent Monopolies 3. What government agency oversees radio and TV broadcasts? FCC

4. Which government agency tries to prevent air and water pollution 4. Which government agency tries to prevent air and water pollution? EPA 5. What government agency protects consumers by monitoring the products and actions of businesses? FTC 6. When the government builds a highway they are producing a … Public good

7. True or False: Most public goods would not be available if individuals had to produce them. True 8. When the United States Post Office delivers the mail they are providing a … Public Service 9. The government produces public goods because they benefit … many people

10. National defense, public schools, and public libraries are all examples of – public goods and services 11. The government collects taxes to pay for and provide … 12. Besides collecting taxes and borrowing funds how else can the government pay for public goods and services? fees

13. What is the government trying to influence when it gets involved in taxing, spending, and borrowing? The economy 14. What will happen to our taxes if the government wants to spend more money? Taxes will increase 15. If the government reduces the taxes on its citizens how will it affect business and individual spending? Spending will increase

16. If the government raises the taxes on its citizens how will it affect business and individual spending? Spending will decrease 17. If the government borrows more funds how will it affect borrowing by businesses and individuals? Borrowing will decrease

18. What should happen to demand, production, and employment if the government spends more money? They may increase 19. What should happen to demand, production, and employment if the government spends less money? They may decrease

20. What amendment allows the government to tax your income 20. What amendment allows the government to tax your income? 16th Amendment 21. The right of private property is protected by – Negotiated contracts

22. Contracts are enforceable by the – law 23 22. Contracts are enforceable by the – law 23. To protect consumers, federal agencies establish guidelines for public … health and safety 24/25. What can consumers do if they are harmed by a product or a company intentionally misleads them about a product? Take legal action

26. It is often called the “Banker’s Bank”, but what is the name for the central bank of the United States? The Federal Reserve 27. Who can control interest rates, regulate the money supply to keep inflation low, and regulate banks?

28. What will happen to the economy if the Federal Reserve lowers the discount rate? Economy will grow 29. What will happen to the economy if the Federal Reserve lowers the reserve requirement?

30. What will happen to the economy if the Federal Reserve raises rates or sells government securities? Economy will slow down 31. What does the government issue to make it easier to exchange goods and services? Money

32. Why do people accept and use the money the government issues 32. Why do people accept and use the money the government issues? People have confidence in the government 33. What are Checks, Debit Cards, Coins, and Federal Reserve Notes examples of? Money