Miss Case

* What effect do government intervention taxation and regulations have on economic behavior? Explain.

Government intervention taxation and regulations impact our society in many ways.

The government creates an environment that can enhance stability and growth in

a society.

In America, individuals who work, pay income taxes. Those taxes are used

by the government to sustain our economy. Since the government requires by

regulation that one pays income taxes, these taxes provide funding for the

infrastructure of the country (e.g. roads, transportation system, national defense and

education).

If America did not have taxes as a nation, our infrastructure system would be challenged, compromised, and thereby negatively impact the economy. For example, the trucking and railroad system transports our goods and services which are made by manufacturers. The same system brings the manufacturers their supplies in order to make the goods. The same highway and train system (infrastructure) is used by the employees to get to their jobs. The economic behavior of the country would be in a compromised state if the infrastructure as well as the government intervention and regulations were not maintained. Overall, in the example I provided, government intervention taxation and regulations provides a national standard for the maintenance of the infrastructure of the country and impact economic behavior.