icon-background-square
New
New
Year 10

Is UK Government action led by the economy?

I can explain how we know if the economy is healthy and how the economy affects the UK Government.

icon-background-square
New
New
Year 10

Is UK Government action led by the economy?

I can explain how we know if the economy is healthy and how the economy affects the UK Government.

warning

These resources will be removed by end of Summer Term 2025.

Switch to our new teaching resources now - designed by teachers and leading subject experts, and tested in classrooms.

Lesson details

Key learning points

  1. A healthy economy has GDP growth, low unemployment, stable inflation and strong business investment.
  2. In a recession, the Government may borrow money or lower taxes, while in a strong economy, it invests in services.
  3. Inflation is important, and the Government aims to keep it low but positive to prevent rapid price rises or slow growth.
  4. Taxes may be raised to control inflation in good times, and cut to boost spending in a recession.
  5. While areas like defence, law enforcement and elections are less affected by the economy, it still influences decisions.

Keywords

  • Economy - the state of a country or region in terms of the production and consumption of goods and services and the supply of money

  • Inflation - the rate at which the prices of goods and services rise over time, meaning money gradually loses value

Common misconception

Inflation is always a negative thing because it raises prices of goods and services.

A small amount of inflation is actually necessary to keep the economy stable and encourage spending.


To help you plan your year 10 citizenship lesson on: Is UK Government action led by the economy?, download all teaching resources for free and adapt to suit your pupils' needs...

To keep the lesson relevant, research the latest UK inflation rate and economic conditions beforehand so you can explain the current situation accurately to your class.
speech-bubble
Teacher tip
equipment-required

Equipment

content-guidance

Content guidance

  • Depiction or discussion of sensitive content
  • Depiction or discussion of violence or suffering
supervision-level

Supervision

Adult supervision required

copyright

Licence

This content is © Oak National Academy Limited (2025), licensed on Open Government Licence version 3.0 except where otherwise stated. See Oak's terms & conditions (Collection 2).

Lesson video

Loading...

6 Questions

Q1.
Which member of the Cabinet is responsible for overseeing the work of HM Treasury?
Speaker of the House
Chief Whip
Correct answer: Chancellor of the Exchequer
Prime Minister
Q2.
What is the role of taxes?
to take money away from businesses and individuals with no benefit
Correct answer: to fund public services and government spending
to encourage people to spend less money
to ensure that businesses always make a profit
Q3.
Fill in the blank: The main tax taken form a person's pay is known as tax.
Correct Answer: income
Q4.
Match the terms to the correct definitions.
Correct Answer:budgeting,planning income and expenses to manage money effectively
tick

planning income and expenses to manage money effectively

Correct Answer:borrowing,taking money from a lender with an agreement to repay it later
tick

taking money from a lender with an agreement to repay it later

Correct Answer:saving,setting aside money for future use, often in a bank account
tick

setting aside money for future use, often in a bank account

Correct Answer:consumer rights,protections and entitlements when buying goods or services
tick

protections and entitlements when buying goods or services

Correct Answer:interest,the extra money a person needs to pay back for having loan
tick

the extra money a person needs to pay back for having loan

Q5.
What is 'the Budget'?
a monthly report on the UK’s economic performance
a list of all government debts and loans
a global agreement on economic policies between countries
Correct answer: a yearly statement where the Government outlines its spending and taxation plans
Q6.
What does 'VAT' stand for?
Correct answer: Value Added Tax
Variable Annual Tax
Voluntary Additional Tax
Voter Allocation Tax

6 Questions

Q1.
Match the term to its correct definition.
Correct Answer:economy,the system of trade, industry and money in a country
tick

the system of trade, industry and money in a country

Correct Answer:inflation,the rate at which prices rise, affecting the value of money
tick

the rate at which prices rise, affecting the value of money

Correct Answer:gross domestic product (GDP),the total value of all goods and services produced in a country
tick

the total value of all goods and services produced in a country

Correct Answer:recession,a period where a country's overall financial activity decreases
tick

a period where a country's overall financial activity decreases

Q2.
Fill in the blank: The UK Government may raise during strong economic times to prevent inflation from rising too fast.
Correct Answer: taxes
Q3.
Which of the following is not a way the Government responds during a recession?
lowering taxes
borrowing money
Correct answer: raising interest rates
limiting pay increases for public servants
Q4.
Why might some people feel that the Government should avoid implementing austerity measures?
Correct answer: It can lead to cuts in public services, affecting vulnerable people.
It increases government debt in the long run.
It prevents inflation from rising.
It has no impact on employment levels.
Q5.
Which of these is a feature of a healthy economy?
high levels of government borrowing
Correct answer: low unemployment
sharp increases in the cost of living
decreasing business investment
Q6.
How did the economy influence government action during the height of the Covid-19 pandemic?
All countries were equally able to buy supplies, regardless of economic status.
Governments reduced healthcare spending to focus on other priorities.
Governments avoided spending money during the pandemic to prevent debt.
Correct answer: Richer countries could afford more medical equipment, protection and vaccines.