The Government & The Economy

Question 0

Economics can affect the economy in ?

Answer 0

A wide variety of ways

• more jobs in a country - higher population
• less jobs, less ppl

Question 1

What four areas has government activities had a powerful effect on the economy?

Answer 1

1. Stabilization & Growth
2. Regulation & Control
3. Direct Services
4. Direct Assistance

Question 2

How does the US use stabilization & growth to help the economy?

Answer 2

Maintain the prime interest rate

Question 3

Who is in charge of addressing the prime interest rate?

Answer 3

Secretary of the US treasury

** Prime interest rate affects the rate banks charge & lending

Question 4

Through adjusting the prime interest rate (US Secretary of Treasury), what can occur?

Answer 4

Create more credit & growth

Question 5

With the US secretary of treasury adjusting the prime interest rate, what must they be careful of?

Answer 5

Mitigating inflation -

Devaluing the dollar

** has less buying power

Question 6

What does regulation & control affect in the US economy?

Answer 6

1. Sets rules for commerce between interstate & interational
2. Creates rules to regulate cheating
   * not adhering to a contract
3. Regulate Financial services
   * wall street

Question 7

How does Direct Services of the government affect the US economy?

Answer 7

Services benefiting the people that pay the tax

• military

Question 8

What is direct assistance in the US government in aiding the economy?

Answer 8

Financial assistance

• welfare
• social security
• ppl pay into then gov’t gives money based on how much they gave