The Role of the Government in the Economy
The government plays an important part in the economy. There are different types of organisations like the Local, UK and the European government which control businesses. They try to make sure most people are employed, and they encourage new businesses to start in the UK.
The government also calculates the GDP (Gross Domestic Product) which is the total amount earned or produced by the country. They calculate this in three ways, by expenditure - how much people in a country spend in a year, by income – how much people earn in a year and lastly by output, - calculating the value of goods and service produced in a year.
It is good when Britain’s economy is healthy, due to the fact that people use money to hire labour and pay wages, which means they tend to spend more money on goods. The richer everyone is, the more people are employed. This leads to the government saving money because they still get their taxes, but don’t have to pay benefits.
It helps the economy when companies hire more workers because they don’t have to pay benefits to those people who are employed. This goes in a cycle e.g. the factory hires workers, they pay wages, they workers live in a house, they buy more goods from shops, and the shop then buys goods from the factories, and so on. The government’s job in the economy is that they try to set low taxes so consumers are able to spend and to have “spare money”. For businesses to invest in new things e.g. technology, equipment and staff. To encourage people to export more than they import.
It’s important for the government to try to get everyone employed so that they get taxes they get, so that they can spend it on the economy. It can be difficult to get everyone employed because skills can be outdated, such as technology is always improving.
Also people with disability problems and people who have no choice to stay home due to their children they have to look after.
Inflation is when prices of goods in stores have increased.
The government also calculates the GDP (Gross Domestic Product) which is the total amount earned or produced by the country. They calculate this in three ways, by expenditure - how much people in a country spend in a year, by income – how much people earn in a year and lastly by output, - calculating the value of goods and service produced in a year.
It is good when Britain’s economy is healthy, due to the fact that people use money to hire labour and pay wages, which means they tend to spend more money on goods. The richer everyone is, the more people are employed. This leads to the government saving money because they still get their taxes, but don’t have to pay benefits.
It helps the economy when companies hire more workers because they don’t have to pay benefits to those people who are employed. This goes in a cycle e.g. the factory hires workers, they pay wages, they workers live in a house, they buy more goods from shops, and the shop then buys goods from the factories, and so on. The government’s job in the economy is that they try to set low taxes so consumers are able to spend and to have “spare money”. For businesses to invest in new things e.g. technology, equipment and staff. To encourage people to export more than they import.
It’s important for the government to try to get everyone employed so that they get taxes they get, so that they can spend it on the economy. It can be difficult to get everyone employed because skills can be outdated, such as technology is always improving.
Also people with disability problems and people who have no choice to stay home due to their children they have to look after.
Inflation is when prices of goods in stores have increased.