Miss Smith 7 th Grade Civics *pgs

 If wages aren’t increasing with inflation, workers must lower their standard of living  If consumers spend less, business make less profit and the produce less  This can result in people losing their jobs  Unemployed people can’t pay taxes

 Too much money in circulation can cause inflation  This causes prices to rise  Businesses that expand too fast and produce too many goods than they can sell can cause them to lose money

 Gov. spending money mostly comes from taxes and borrowed money  This puts more money into circulation  Also causing inflation

 The amount a worker produces per hour  Rising productivity = higher wages and profits and lower prices  Recently, American productivity has slowed

 Fiscal policy- federal government’s policy (rule or course of action) of taxing and spending  An impending recession may result in lower taxes  Monetary policy- federal government’s policy regarding money

 Reduce Government Spending  Increase Saving  Buy American-Made Products  Increase Productivity