Term
| What is the government budget? |
|
Definition
| A plan for spending and raising revenues |
|
|
Term
| Revenue is another word for _____ |
|
Definition
|
|
Term
| 3 major divisions of government spending |
|
Definition
1. mandatory outlays
2. interest payments
3. discretionary spending |
|
|
Term
| What are mandatory outlays? |
|
Definition
"Entitlement Programs"
- government spending on ongoing programs like social security, medicare, etc |
|
|
Term
| What are interest payments? |
|
Definition
| Payments made to current owners of US treasury bonds |
|
|
Term
| What is discretionary spending? |
|
Definition
- can be altered
- spending on bridges roads, gov workers, etc |
|
|
Term
Which of the 3 categories does the Government spend the most on?
A. Mandatory
B. Interest
C. Discretionary |
|
Definition
|
|
Term
|
Definition
| a government administered retirement funding program |
|
|
Term
| What is the goal of social security? |
|
Definition
| No american worker retires without at least some retirement income |
|
|
Term
|
Definition
| A mandated federal program that funds health care for retired people |
|
|
Term
| What is the goal of Medicare? |
|
Definition
| To provide medical insurance for all retired workers |
|
|
Term
| The different tax revenues that make up Government Revenue (5) |
|
Definition
1. income taxes
2. social insurance/payroll taxes
3. corporate income tax
4. estate and gift taxes
5. excise taxes |
|
|
Term
| When does a budget deficit occur? |
|
Definition
When government spending exceeds government revenue
government spending > tax revenue |
|
|
Term
| When does a budget surplus occur? |
|
Definition
When government revenue is greater
Tax revenue > Government spending |
|
|
Term
| The Federal Debt is the accumulation of all ____ and _____ |
|
Definition
|
|
Term
| 2 false concerns about debt |
|
Definition
1. Bankruptcy
2. Burdening future generations |
|
|
Term
| Real problems with Debt (3) |
|
Definition
1. Income distribution
2. Incentives
3. Foreign owned public debt |
|
|
Term
|
Definition
| Changes in government spending or taxation |
|
|
Term
| What are the 3 goals of Fiscal policy? |
|
Definition
1. Promote full employment
2. Price stability
3. Encourage economic growth |
|
|
Term
Which 2 goals are the most important of Fiscal policy?
A. Promote Full Employment
B. Price Stability
C. Encourage economic growth |
|
Definition
| Promote Full Employment and Encourage Economic growth |
|
|
Term
| Expansionary Fiscal Policy is used during a ______ |
|
Definition
|
|
Term
| Expansionary fiscal policy _______ government spending and ______ taxes. |
|
Definition
|
|
Term
| What does Expansionary fiscal policy create? |
|
Definition
|
|
Term
| Contractionary Fiscal Policy is used during times of ______ or _____ ______ |
|
Definition
| inflation ; economic booms |
|
|
Term
| Contractionary Fiscal Policy _____ government spending and ______ taxes. |
|
Definition
|
|
Term
| Contractionary fiscal policy creates a _______ ______ |
|
Definition
government surplus
- tax revenue > gov spending |
|
|
Term
| The US has which type of tax system? |
|
Definition
|
|
Term
| What are automatic stabilizers? |
|
Definition
| taxes vary with GDP - individuals pay less taxes when incomes fall |
|
|
Term
| 3 lags with fiscal policy |
|
Definition
1. recognition lag
2. administration lag
3. operational lag |
|
|
Term
| What is recognition lag when discussing problems with fiscal policy? |
|
Definition
| Takes time to realize that we are in a recession |
|
|
Term
| What is administration lag when discussing problems with fiscal policy? |
|
Definition
| Takes a long time for congress to agree on anything |
|
|
Term
| What is Operational lag when discussing problems with fiscal policy? |
|
Definition
| Who is going to get that money? etc. |
|
|
