Chapter+12

=Chapter 12: Government and the United States Economy=

Can You:

 * Describe the roles and responsibilities of government in our economy?
 * Differentiate and understand different types of taxes: progressive, regressive, proportional?
 * Provide examples of an externality?
 * Explain the difference between the "Ability to Pay" and "Benefits Received" principles of taxation?
 * Describe the differences between **fiscal** and **monetary** policy, and know which government body/organization is responsible for it?
 * Define: deficits, national debt, outlay, receipt, full employment, privatization, public sector
 * Develop and support your own opinion on whether "big government" or "small government" is better for the American economy?

=Extra Credit (Answer each question in 3-4 COMPLETE sentences to be considered for full credit):=

1. List three public services your community provides. For each item indicate:

a. Whether you think the service is worth the cost. b. Whether you think that private industry could provide these three same services at less expense and more efficiently than government.

2. The property tax is the most principle source of income for most states and localities.

a. Why is the property tax popular with local government? b. Why is it sometime criticized?

3. Again, a "good tax" is said to have the following characteristics:

a. **Fairness** - based on the ability to pay and treats people equally. b. **Clarity** - taxpayers know the rate of the tax and how it is paid. c. **Convenience of payment** - easy for taxpayers to pay and easy for government to collect. d. **Ease of administration** - cost of collecting a tax is low. e. **Flexibility** - adjusts to economic conditions (in prosperous times the tax generate more revenue and in hard times less).

Use these criteria to compare the **personal income tax** and the **sales tax** for your state.


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