The financial planning environment Who Participates in the Financial Planning Environment, and What Do They Do? Financial planning activities are conducted in a dynamic economic environment. In the United States, the economy consists of three major types of participants-consumers, businesses, and government organizations-each pursuing their unique goals and objectives. The interactive activities of these participants create the circumstances in which you conduct your financial planning activities and strongly influence your outcomes. Who are consumers and how do they affect the economic environment? Most people recognize that, as a group, consumers are the pivotal participants in the economy. The decisions made by consumers determine which goods and services will be produced by businesses, just as their investment and saving decisions will strongly influence conditions in markets. the Another indication of the importance of consumers is the effect their collective spending has on the economic activity level observed in the economy and all benefits or costs that go with it. in the level of consumer spending is usually credited with causing How do businesses contribute to conditions in the economic environment? in return for Businesses sell to consumers and government organizations, providing them with to the production process provided by consumers (namely To accomplish this, businesses transform the land, labor, equipment, managerial talent, and a willingness to take risks) into finished products and services. In return, consumers are paid in the form of rent, wages, interest, and profits are probably the most constrained participant in the economy, because in the long term their choice of goods and Businesses, or services produced is dictated by the purchasing preferences of consumers and government organizations, or In addition, businesses are also constrained by the laws and regulations imposed by federal, state, and local government organizations What role do government organizations play in the economic environment? Federal, state, and local government organizations fulfill several roles within the economy. Which of the following are roles provided by government organizations? Check all that apply. Acting as a consumer of goods and services O Restricting access to economic information Employing consumers The principal tools used by government organizations to constrain the activities of businesses and consumers are: Initiating negative social media campaigns and enacting regulations O Enacting monetary policy and fiscal policy level In overseeing the economy, the goals of the federal government are economic and a high The two principal policy tools that the federal government uses to manage economic conditions are monetary policy and fiscal policy ▼ is used to control the size of the money supply to stimulate or moderate business activity levels in the economy. In contrast, uses government spending and taxation to do the same. What policy tools can be used to increase or decrease an economy's activity level? If the federal government wants to decrease production and purchasing activity levels in the economy, which of the following policy tools could it use?A. Increase tax rates. B. Decrease the money supply C. Decrease government spending D. Reduce tax rates.