chapter 24-25

• What is the general role of the government?

  To improve the general welfare of its people
• Why does the government collect tax revenues?

  To fund its expenditure on essential services
• Name three essential services funded by government expenditure.

  Health care, infrastructure, and national security
• What are some local roles of government?

  • Opening times for businesses
  • Rubbish collection
  • Street lighting
  • Hospitals
  • Libraries
  • Parks
  • Museums
• What is a budget surplus?

  When government revenues exceed expenditures
• What are the five macroeconomic aims of government?

  Economic growth, full employment, a stable price level, current account stability, and reduced inequality
• How does the role of governments relate to economic systems?

  A government plays a larger role in a mixed economic system than in a market-based economic system
• Why is economic growth important to the economy?

  It raises living standards and helps achieve other macroeconomic aims
• What are common macroeconomic aims of the government?

  • Low unemployment
  • Economic growth
  • Redistribution of income and wealth
  • Stable price levels
  • Balance of payments
• What does it mean for a government to act as a producer?

  It means the government can produce products deemed important for the public
• How does the government evaluate its macroeconomic aims from the perspectives of consumers, firms, and itself?

  By assessing the impact of each aim on living standards, business operations, and overall economic health
• What is the definition of economic growth?

  An increase in the output of an economy and its productive potential
• What are strategic industries?

  Industries important for the economic development and safety of the country
• What are the five macroeconomic aims of government?

  Economic growth, full employment, a stable price level, current account stability, and reduced inequality