The Role of Government and Policy

Image of Washington Monument at night.In this topic, you learned that the federal government performs a number of tasks for the well-being of the nation and its citizens.

Fiscal and monetary policy are two of the tools that the government uses to try and stabilize the economy. Fiscal policy is any change in government spending or taxation to stimulate or slow the economy, while monetary policy targets the nation's money supply to promote economic stability.

Every year, the government creates a budget that lays out how it will spend its revenues in order to pursue its policies including money for the military and social programs like Medicare.

You also learned how the government protects personal property rights and enforces contracts. This is important because people understand that no one can take away their property without compensating them, or that others cannot back out of a contract into which they have entered.

Finally, we looked at how the government regulates businesses to make sure that consumers are protected from monopolies and harmful products.