Financing the Government
Discretionary Spending
Federal spending on programs that are controlled through the regular budget process
World Bank
a United Nations agency created to assist developing nations by loans guaranteed by member governments
IMF
a United Nations agency to promote trade by increasing the exchange stability of the major currencies, International Monetary Fund
Entitlements
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
NAFTA
a trade agreement between Canada, the United States and Mexico that encourages free trade between these North American countries.
Social Security
1935, guaranteed retirement payments for enrolled workers beginning at age 65
Medicare
A federal program of health insurance for persons 65 years of age and older
Medicaid
A health care payment program sponsored by federal & state governments
Estate tax
A tax on the estate, or total value of the money and property, of a person who has died
Holders of the US debt
China
Excise tax
Consumer tax on a specific kind of merchandise, such as tobacco
Uncontrollable Costs
Costs that cannot be changed or influenced in the short run by management
Welfare/Food stamps
Government aid to the poor
GDP
Gross Domestic Product
American Trade Partners
Japan, Canada, Mexico, and China
Unemployment
Number of civilians at least 16 years who have been trying to find a job within the prior four weeks
OASDI
Old Age Survivors and Disability Insurance
Problems/benefits of globalization
Problems: evenly highly educated people can be manipulated by demagogic leaders who play on their fears and prejudice
Mandatory spending
Required govt spending by permanent laws
Income tax
Tax paid to the state, federal, and local governments based on income earned over the past year
Customs duties
Taxes on goods brought into the country for sale; also called tariffs
WTO
The World Trade Organization - an international body that enforces agreements that reduce barriers to international trade
Trade embargo
a government order imposing a trade barrier
Fiscal Policy
a government policy for dealing with the budget (especially with taxation and borrowing)
Tariff
a government tax on imports or exports
Import quota
a limit on the amount of a good that can be imported
Regressive tax
a tax for which the percentage of income paid in taxes decreases as income increases, hurts poor more than rich
Progressive tax
a tax for which the percentage of income paid in taxes increases as income increases
Gift tax
a tax imposed on transfers of property by gift during the lifetime of the giver, if more than 13000 will be taxed
Individual Income Tax
a tax on a person's earnings
Supply-side economics
advocated by President Reagan, holding that too much income goes to taxes and too little money is available for purchasing. The solution is to cut taxes and return purchasing power to consumers.
Agricultural economy
agricultural economy or an economy in which people meet most of their needs by farming
Public debt
all of the money borrowed by the government and not yet repaid
Money Supply
all the money available in the United States economy
Revenue
an increase in owner's equity resulting from the operation of a business
European Union
an international organization of European countries formed after World War II to reduce trade barriers and increase cooperation among its members
Power to Borrow
article 1, section 8, clause 2 gives congress the power " to borrow money on the credit of the united states
Federal Reserve
central banking system of the US
Controllable Costs
costs that can be influenced or changed by management
Corporation income tax
each corporation mush pay a tax on its net income- that is, on all of its earnings above the cost of doing business
Protectionism
economic policy of shielding an economy from imports
Manufacturing economy
economy in which a large portion of employees are engaged in work that is aimed at producing manufactured products
Purposes of taxation
generate Revenue
Exports
goods and Services sold to other countries
Imports
goods produced abroad and sold domestically
Monetary Policy
government policy that attempts to manage the economy by controlling the money supply and thus interest rates.
Luxury taxes
levied on the sale of luxury goods
Payroll tax
tax on wages and salaries to finance Social Security and Medicare costs
Demand-side economics
the idea that government spending and tax cuts help an economy by raising demand
Power to Tax
the national government's power to tax the people for revenue
Keynesian economics and the Great Depression
the use of government spending and taxing to help stabilize the economy
Purposes of Trade
to earn money and receive resources that you do not have in your nation
Service Economy
where the majority of people earn their living by providing a service rather than manufacturing a product
Surplus
you bring more money in than you owe
Deficit
you owe more money than you bring in
