1. Government Role in the Economy

2. Virginia Standards of Learning
CE.12 The student will demonstrate knowledge of the structure and operation of the United States economy by
d) examining the relationship of Virginia and the United States to the global economy, with emphasis on the impact of technological innovations.
CE.13 The student will demonstrate knowledge of the role of government in the United States economy by
a) examining competition in the marketplace;
b) explaining how government provides certain goods and services;
c) describing the impact of taxation, including an understanding of the reasons for the 16th Amendment, spending, and borrowing;
e) describing the protection of consumer rights and property rights

3. Student objectives
Examine the relationship of Virginia and the United States to the global economy with emphasis on technology.
Examine competition in the marketplace.
Explain the creation of public goods and services.
Explain the impact of taxation, including the 16th amendment, spending and borrowing.
Describe the protection of consumer and property rights.

4. What is the global economy?
Worldwide markets in which the buying and selling of goods and services by all nations takes place

5. List four reasons why states and nations trade.
To obtain goods and services that they cannot produce
To buy goods and services at a lower cost
To sell goods and services to other countries
To create jobs

6. List two impacts of technological innovations.
Better flow of information, capital, goods, and services
Lower production costs

7. List three ways that the government promotes marketplace competition.
Enforcing antitrust legislation to discourage the development of monopolies
Engaging in global trade
Supporting business start-ups

8. List three government agencies that regulate business.
Federal Communications Commission (FCC)
Environmental Protection Agency (EPA)
Federal Trade Commission (FTC)

9. List three characteristics of public goods and services.
Provide benefits to many simultaneously
Would not be available if individuals had to provide them
Include such things as interstate highways, postal service, and national defense

10. List three ways that government gets revenue to pay for public goods and services.
Taxation
Borrowing
Fees

11. What is the Sixteenth Amendment?
The Sixteenth Amendment authorizes Congress to tax personal and business incomes

12. Describe the impact of taxation, borrowing, and spending on the economy.

13. Taxation
Tax increases – SLOW the economy by reducing funds available for individual and business spending
Tax decreases – STIMULATE the economy by increasing funds available for individual and business spending

14. Government borrowing
Increased borrowing – SLOWS the economy by reducing funds available for individuals and businesses to borrow
Decreased borrowing – STIMULATES the economy by increasing funds available for individuals and businesses to borrow

15. Government spending
Increased spending – STIMULATES the economy by increasing demand
Decreased spending – SLOWS the economy by decreasing demand

16. What is the role of the U. S
What is the role of the U. S. government in protecting consumer rights and property rights?
Individuals have the right to own private property protected by negotiated contracts enforceable by law
Government agencies establish guidelines that protect public health and safety
Consumers may take legal action against violations of consumer rights