Government and the Economy

Health of the Economy

The United States Government works to maintain a healthy economy. Just as a doctor uses many different indicators to figure out if your body is healthy, the United States government uses many economic indicators to determine if the economy is healthy. In this interactivity, you will learn about the four indicators of economic health. Click the player button to begin.

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The Government's Influence on the Economy

As you just learned, a healthy economy is usually defined as one with low unemployment and low inflation. This allows for Gross Domestic Product to grow, and exchange rates to strengthen. If the United States government determines that the economy is not healthy after examining these economic indicators, it can influence the economy through monetary and fiscal policy, which you will examine in this interactivity. Click the player button to begin.

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Government Spending Programs

The U.S. economy saw substantial growth and prosperity in the second half of the twentieth century. Specifically, the government implemented the G.I. Bill and created the Interstate Highway System. Both of these programs, along with others, helped contribute to a rise in the middle class. Hover your cursor over the images below to learn details about each of the programs.

The government also embarked on spending to help non-middle class Americans. President Lyndon Johnson attempted to eliminate poverty and racial injustice by creating a "Great Society." Johnson called this a "War on Poverty." One initiative created at this time was Medicare, a federal health insurance program for people over the age of sixty-five. Another initiative that was started was Medicaid, a health coverage program for certain disadvantaged groups like those with low income, pregnant women, and children. A third initiative was the Economic Opportunity Act. The goal of this act was to end poverty by providing a number of supports that included job development, educational training opportunities, and efforts to improve local community economies. Each of these initiatives highlight government spending intended to help the general welfare of Americans in need.

 

Government and the Economy Review

Now that you have learned about government and the economy, review your knowledge in this non-graded activity. Click on the player button to get started.