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THE GOVERNMENT, TAXATION, & ECONOMIC ACTIVITY CE.13C.

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Presentation on theme: "THE GOVERNMENT, TAXATION, & ECONOMIC ACTIVITY CE.13C."— Presentation transcript:

1 THE GOVERNMENT, TAXATION, & ECONOMIC ACTIVITY CE.13C

2 QUESTION How does the government influence economic activity?

3 ECONOMIC ACTIVITY taxes, borrows, and spends The government taxes, borrows, and spends to influence economic activity.

4 GOVERNMENT TAX CYCLE Government tax increases reduce the funds available for individual and business spending; tax decreases increase funds for individual and business spending.

5 GOVERNMENT BORROWING Increased government borrowing reduces funds available for borrowing by individuals and businesses; decreased government borrowing increases funds available for borrowing by individuals and businesses. US Debt- http://www.usdebtclock.org/http://www.usdebtclock.org/

6 GOVERNMENT SPENDING Increased government spending increases demand, which may increase employment and production; decreased government spending reduces demand, which may result in a slowing of the economy.

7 GOVERNMENT SPENDING Increased government spending may result in higher taxes; decreased government spending may result in lower taxes.

8 THE 16 TH AMENDMENT The 16th Amendment to the Constitution of the United States of America authorizes Congress to tax personal and business incomes.

9 REVIEW Describe the impact of taxation, including an understanding of the reasons for the 16th Amendment, spending, and borrowing.


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