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Year 10 - Citizenship

How does the Government get its money?

How does the economy work?

Unit Summary

Pupils learn what the economy is, what taxes are and consider local and central government spending and risk management.

Lesson Summary

You will learn to explain what the Budget is and how the Government funds the country.

Key Notes

  • The Budget is a financial framework that annually shows how the Government generates and allocates money.
  • The Government funds the country through six primary revenue streams including taxation, borrowing, natural resources.
  • Taxation is the main source of government revenue, with income tax, VAT and corporate levies funding public services.
  • The Government incurs debt by issuing bonds, creating national liabilities that must be repaid with interest.
  • Natural resources, such as oil from the North Sea, and public assets like land are sold or taxed to generate revenue.

Vocabulary To Learn

  • Budget: the Government's yearly financial plan, showing how much money it will collect and spend on public services like healthcare, education and transport
  • funds: provides money for something, for example, the Government raises and allocates money

Common Mistakes To Avoid

  • The Budget just shows how money is allocated across the country.

3 Quick Questions (With Answers)

1. Explain the lesson in two key points.

The Budget is a financial framework that annually shows how the Government generates and allocates money. The Government funds the country through six primary revenue streams including taxation, borrowing, natural resources.

2. What does this key word mean in this lesson? 'Budget'

the Government's yearly financial plan, showing how much money it will collect and spend on public services like healthcare, education and transport.

3. Correct this common mistake.

Mistake: The Budget just shows how money is allocated across the country. Correction: The Budget maps all income and expenditure so it shows us what money goes where and how money is generated, not just allocated.

More Lessons In This Unit

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