Copyright Goodheart-Willcox Co., Inc. 26 Chapter 1 Financial Literacy Basics Government and the Economy It would be difficult to overstate the impact of government policies on the economy and, in turn, on consumers. Fiscal and monetary policies affect prices and wages, availability and cost of credit, job opportunities and employment trends, growth and international trade, and a host of other economic conditions. In the area of consumer information, very few sources can provide more complete information than the government. Government publications explain everything from how to raise bees to writing your last will and testament. Much of this information can assist you in financial planning and money management. Government programs provide direct public assistance for many people. An entitlement is a government program that provides financial benefits to eligible citizens based on their legal rights. Examples of entitlement programs include Medicaid, Medicare, and Social Security. These programs are called entitlements because as long as a citizen meets the eligibility requirements, he or she has a legal right to receive the program’s benefits. These programs account for over 60 percent of the federal budget. This type of assistance plays an important role in personal financial planning for most citizens. As changes in these programs and in tax laws occur, citizens will need to adjust their financial plans. Real numbers are all whole and fractional or decimal numbers on a continuous number line that are not imaginary. Whole numbers are numbers with no fractional or decimal portion. Decimals are numbers with digits to the right of the decimal point. An imaginary number is any number that results in a negative number when squared. An imaginary number always includes the notation i, such as 2i. To add a positive number, move to the right on the number line. To subtract a positive number, move to the left on the number line. Solve the following problems. 1. 5.87 + 4.956 + 2.011 + 4 = 2. 34 + 9 – 127 + 783 = 3. 112.058 + 2.1 + 93.237 = 4. 987 + 705 + 827 + 4 = 5. 73 + 8 – 12 = You Do the Math Numeric Reasoning