• The government is involved in the economy for a number of reasons: 1. To regulate the economy; 2. To create jobs and collect taxes; 3. To protect natural resources; 4. To support enterprise.
• Taxation is the government practice of collecting money from the individuals and businesses in a country to pay for public services.
• Debt servicing is the amount of money that the government allocates for paying off national debt. • Capital refers to one-off or long-term income and expenditure. • Current refers to everyday or regular income and expenditure.
• The national budget is a document showing the government’s planned income and expenditure for the next year.
• If the planned total income is greater than the planned total expenditure, it is a surplus budget. • If the planned total expenditure is greater than the planned total income, it is a deficit budget. • If the planned total income is equal to the planned total expenditure, it is a balanced budget.
Taking stock A
Go to page 219 of your Activities and Accounts Book to check what you have learned in chapter 31.
