Chapter 10: Government Spending – Flashcards
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how much money each individual in the country earns
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Per Capital
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the part of the economy that involves the transactions of the government
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Public sector
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the part of the economy that involves the transactions of individuals and businesses
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Private sector
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Benefits to citizens which are paid out of tax revenue
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Transfer payment
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a transfer payment one level of government makes to another
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Grant in aid
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the way in which income is allocated among families, individuals, or other designated groups in the economy
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Distribution of income
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extravagant, consumption
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List the two kinds of spending
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(1) Taxes; (2) Import Restrictions; (3) Wholesale Interest Rates; and (4) Government Spending
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Identify three ways that government spending may impact the economy
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a plan for the federal government's revenues and spending for the coming year
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Federal budget
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Required govt spending by permanent laws
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Mandatory spending
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Federal spending on programs that are controlled through the regular budget process
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Discretionary spending
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A 12-month pd, October through Septmeber, for planning the federal budget
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Fiscal year
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The amount by which federal expenditure exceeds federal revenue.
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Federal budget deficit
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An excess of revenues over expenditures
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Federal budget surplus
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An act of Congress that actually funds programs within limits established by authorization bills. Appropriations usually cover one year.
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Appropriations bill
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A health care payment program sponsored by federal & state governments
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Medicaid
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Describe the three stages required to establish the federal budget
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List the five largest components of federal government spending
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a constitutional amendments that requires that annual spending not exceed revenues
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Balance budget amendment
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funds that one level of government transfers to another for spending
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Intergovernmental expenditures
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List the seven major categories of state spending
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list the seven major categories of local government spending
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Government practice of spending more than it takes in from taxes
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Deficit spending
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all the money borrowed by the federal government over the years and still outstanding
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Federal debt
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a budget is balanced when current expenditures are equal to receipts
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Balanced budget
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Funds for government programs that are collected and spent outside the regular government budget
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Trust funds
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the offset in aggregate demand that results when expansionary fiscal policy raises the interest rate and thereby reduces investment spending
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Crowding out effect
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a requirment that new spending proposals or tax cuts must be offset by reductions elsewhere
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Pass as you go provision
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An executive's ability to block a particular provision in a bill passed by the legislature
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Line item veto
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legal limits on annual discretionary spending
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Spending caps
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A claim for government funds that cannot be abridged without violating the rights of the claimant; for example, social security benefits or payments on a contract.
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Entitlements
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List five ways the national debt affects the economy
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Identify and discuss the four recent attempts to bring the federal deficit under control
