The economy is an issue that plays a role in every Americans life. But what is it exactly? In short, it is all of the combined wealth and resources of a country, in terms of the production and consumption of goods and services.
Economics extend to all resources – belongings, time, and even your smartphone’s data. Economic policy can be summed up in one question: resources are scarce, so how can society best distribute them?
When politicians propose new ideas such as creating more jobs, or changing how involved the government is in the operation of the economy, what they’re really doing is proposing ways to best allocate our country’s resources to Americans.
The government helps manage the economy in two ways: monetary policy and fiscal policy. Through monetary policy, the government regulates the money supply and interest rates via the Federal Reserve. Through fiscal policy, the government uses its power to tax and spend citizens and businesses.
Should the government be involved in how the economy is run?