LESSON 21.7 Review 21.7.1
Key knowledge summary Use this dot point summary to review the content covered in this topic. 21.2 Our role in the economy • Consumers satisfy their needs and wants by working to earn money, and then buying goods and services from businesses that produce those goods and services. • The finance sector manages our money. • We interact with the overseas sector through buying and selling of goods and services. 21.3 The role of the government in the economy • The government performs a number of roles in the Australian market system including: • the provision of welfare and infrastructure • economic management • regulation of wages and employment conditions • provision of some goods and services • management of planning and the environment • regulation of international trade • setting of immigration policies and targets. 21.4 The Australian taxation system • Australia’s tax system comprises numerous different types of taxes. • Taxes can be direct or indirect. • Taxes may be progressive, proportional, or regressive. • Taxes (rebates) can influence consumer decisions and producer behaviour. 21.5 Inquiry: How would you tax the Australian public? • Many considerations need to be made when developing a fair tax system. 21.6 Consumer and financial literacy • It is important to be able to interact with businesses, financial intermediaries and the government safely and securely. • Consumer literacy helps us make informed decisions. • Financial literacy helps us develop skills to make informed decisions about money. 21.7.2 Key terms budget estimates of all government income to be raised by taxes and other charges, and the planned spending of that income, within any given year capital growth an increase in the value of shares or property over time direct taxation A type of tax that is paid straight to the government by individuals or businesses on their income or profits. For example, income tax is a direct tax because it is taken directly from a person’s earnings. dividends company profits paid to shareholders, either in cash or as more shares export a good or services sold by local businesses to overseas consumers financial institution any organisation that takes deposits from those with surplus funds, and makes those funds available to borrowers household sector a term used by economists to refer to the total of all consumers in the economy import goods or services purchased by local consumers from overseas businesses indirect taxation A type of tax that is added to the price of goods and services and paid to the government by the seller. Consumers pay this tax when they buy things. For example, the Goods and Services Tax (GST) is an indirect tax included in the price of most items.
TOPIC21 Understanding tax and consumer literacy 621
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