Decision Sheet

Sukhpal
PGP14236
Sec-E

1. Fixing Things – Government Building Stuff: Think of the government as a big spender
wanting to give the economy a boost. Here's how they do it:

How it Works: The government decides to spend a lot of money on building things like new
roads and airports.

What Happens: By doing this, the government creates jobs for people in construction and
engineering. These workers then spend their earnings on things they need. Also, the new
roads and airports make everything run better in the long run.

End Result: The economy gets a lift as the government's spending spreads out, creating
more jobs, more money, and more business for everyone.

2. Putting Money in Pockets – Tax Cuts for Regular Folks: Now, picture the government
deciding to cut taxes for people with lower incomes when things are a bit tough.

How it Works: The government decides to go easy on income taxes for folks who don't earn
a lot.

What Happens: People with lower incomes usually prefer spending money rather than
saving it. So, when they get a tax break, they go out and spend more, boosting the demand
for things.

End Result: This spending by regular folks sets off a chain reaction. Businesses see more
demand, so they produce more, hire more people, and even invest in growing their
operations. This keeps the economy moving in a positive direction.

So, in a nutshell, these examples show how the government can use its money tools – like
spending on projects and giving tax breaks – to help the economy grow. But remember, how
well these tricks work depends on a bunch of things, like what's happening in the economy
and how fast the government puts these plans into action. It's a bit like following a recipe –
the right ingredients at the right time make all the difference!