Economics Chapter 10: The Economics of Government Spending – Flashcards
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pork
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a line-item budget expenditure that circumvents normal budget proceduea and benefits a small number of people or businesses
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public sector
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the part of the government made up of local, state, and federal governments
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private sector
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the part of the economy made up of private individuals and businesses
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transfer payment
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payment for which the government receives neither goods nor services in return
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grant-in-aid
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transfer payment from one level of government to another that doesn't involve compensation
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subsidy
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government payment to encourage or protect a certain economic activity
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distribution of income
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way in which the nation's income is divided among families, individuals, or other designated groups
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fiscal year
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12 month financial planning period that may not coincide with the calendar year
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appropriations bill
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legislation authorizing spending for certain purposes
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budget deficit
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a negative balance after expenditures are subtracted from revenues
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mandatory spending
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federal spending authorized by law that continues without the need for annual approvals by Congress
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discretionary spending
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spending for federal programs that must receive annual authorization
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Medicare
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federal health-care program for senior citizens, regardless of income
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Medicaid
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joint federal-state medical insurance program for low-income people
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balanced budget amendment
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constitutional amendment requiring government to spend no more than it collects in taxes, and other revenues, excluding borrowing
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intergovernmental expenditures
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funds that one level of government transfers to another level for spending
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deficit spending
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annual government spending in excess of races and other revenues
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deficit spending
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annual government spending in excess of taxes and other revenues
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national debt
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total amount borrowed from investors to finance the government's deficit spending
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balanced budget
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annual budget in which expenditures equal revenues
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trust fund
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special account used to hold revenues designated for a specific expenditure such as Social Security, Medicare, or highways
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per capita
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per person basis; total divided by population
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crowding-out effect
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higher-than-normal interest rates and diminished access to financial capital faced by private borrows when they compete with government borrowing in financial markets
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"pay-as-you-go" provision
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requirement that new spending proposals or tax cuts must be offset by reductions elsewhere
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line-item veto
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power to cancel specific budget items without rejecting the entire budget
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spending cap
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limits on annual discretionary spending
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entitlement
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program or benefit using established eligibility requirements to provide health, nutritional, or income supplements to individuals
