1. © Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Slide 1 Chapter 5 LESSON 5.4 Government Spending Objectives: By the end of class, students will be able to :  Identify how taxes can influence consumer decisions  Explain what governments spend money on

2. © Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Slide 2 Chapter 5 The Power to Influence  “Sin” taxes- Taxes on goods that are harmful to your health such as tobacco  Tax cuts- Lowering taxes to facilitate beneficial consumer decisions  Charities- What is their purpose? Charity is the process of giving money or assets to aid the poor, ill and helpless.

3. © Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Slide 3 Chapter 5 Government Spending  Social Security, Medicare, and other retirement  Social programs  National defense, veterans, and foreign affairs  Physical, human, and community development  Net interest on the debt  Law enforcement and general government  Debt reduction

4. © Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Slide 4 Chapter 5 U.S. Government Spending for 2002 38% Social security, Medicare, and other retirement 20% National defense, veterans, and foreign affairs 8% Net interest on the debt 10% Physical, human, and community development 21% Social programs 3% Law enforcement and general government

5. © Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Slide 5 Chapter 5 Examples of What State and Local Governments Provide  Building and maintaining roads  Operating police an fire protection services  Maintaining a criminal justice system  Building and staffing schools  Building and operation state colleges and universities  Supporting medical facilities  Constructing and operating sewage treatment plants  Operating unemployment compensation programs

6. © Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Student Practice/ Application  1. Read pages 181-185 in your Economics textbook.  2. Complete Try These questions 1-8 on page 185 of your Economics textbook.  3. Extra Credit: Complete Think Critically questions 9,10,12,&13 on Page 185 of your Economics Textbook.  Reminder: Study for your Formal assessment of Chapter 5 tomorrow! Slide 6 Chapter 5