Economics
Economics is the learning of business production, the distribution and consumption of goods and services in a city or a business.
The role of government
In the UK people who vote elect a national government at Westminster and other local governments in town halls. Voters would expect the government to manage the economy effectively with minimal disruption. Government economic aims include:
· Low unemployment – so that as many people can work as possible.
· Lower prices – The continuous increase in prices is known as inflation. The government aims to have low inflation.
· Economic growth – The aim is to create more goods and services every year so that each person can have a high standard of living.
The government can change the way businesses work and affect the economy by passing bills (laws) or by simply changing its own spending or taxes. For example:
· Additional government spending or lower tax rates can result in more demand for goods and services in the economy and lead to a higher output and employment.
· The governments can pass legislation by protecting consumers and staff.
· The main types of tax include:
· Income tax taken out of a worker's wages. This will result in having less spending money to use.
· Value added tax (VAT) this is added to goods and services. A rise in VAT increases these prices.
· Corporation tax is a tax on business profits. A rise in this tax means that firmss keep less of their profits which lead to less business investment and the possible loss of jobs.
· National Insurance is the contributions to payments made by both the worker and the owner. They will pay for the cost of a state pension and the National Health Service. Any increase in this tax increases a company's costs and might cause inflation.
· Local government collects tax rates from businesses and can use the law to stop planning permission for new properties.
The role of government
In the UK people who vote elect a national government at Westminster and other local governments in town halls. Voters would expect the government to manage the economy effectively with minimal disruption. Government economic aims include:
· Low unemployment – so that as many people can work as possible.
· Lower prices – The continuous increase in prices is known as inflation. The government aims to have low inflation.
· Economic growth – The aim is to create more goods and services every year so that each person can have a high standard of living.
The government can change the way businesses work and affect the economy by passing bills (laws) or by simply changing its own spending or taxes. For example:
· Additional government spending or lower tax rates can result in more demand for goods and services in the economy and lead to a higher output and employment.
· The governments can pass legislation by protecting consumers and staff.
· The main types of tax include:
· Income tax taken out of a worker's wages. This will result in having less spending money to use.
· Value added tax (VAT) this is added to goods and services. A rise in VAT increases these prices.
· Corporation tax is a tax on business profits. A rise in this tax means that firmss keep less of their profits which lead to less business investment and the possible loss of jobs.
· National Insurance is the contributions to payments made by both the worker and the owner. They will pay for the cost of a state pension and the National Health Service. Any increase in this tax increases a company's costs and might cause inflation.
· Local government collects tax rates from businesses and can use the law to stop planning permission for new properties.