How does the Government get its money?
I can explain what the Budget is and how the Government funds the country.
How does the Government get its money?
I can explain what the Budget is and how the Government funds the country.
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Lesson details
Key learning 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.
- 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.
Keywords
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 misconception
The Budget just shows how money is allocated across the country.
The Budget maps all income and expenditure so it shows us what money goes where and how money is generated, not just allocated.
Equipment
Content guidance
- Depiction or discussion of sensitive content
Supervision
Adult supervision recommended
Licence
Lesson video
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Prior knowledge starter quiz
6 Questions
Q1.Match the terms to their correct definitions.
the rate at which prices of goods and services rise over time
a period of economic decline, often leading to increased unemployment
government policies aimed at reducing spending
Q2.Which of the following is a sign of a healthy economy?
Q3.Fill in the blank: The UK Government takes advice on economic policy from the .
Q4.Why might bus services be cut during a recession?
Q5.Fill in the blank: One important measure of a country's economic health is its , which represents the total value of goods and services produced.
Q6.Why does the Government aim to keep inflation low but positive?
Assessment exit quiz
6 Questions
Q1.What does the Budget show?
Q2.Which of the following is not a primary way in which the Government raises money?
Q3.Which of these industries has been fully privatised in order to raise money for the UK Government?
Q4.Why is taxation important for government funding?
Q5.Fill in the blank: The Government borrows money by issuing , which create national debt that must be repaid with interest.
Q6.Match the terms to their correct definitions.
a yearly plan presented by the Chancellor of the Exchequer
provides money for something, such as public services
the money the Government raises, mainly through taxation
the money the Government spends on public services and other costs