Chapter 10

trust funds

Funds for government programs that are collected and spent outside the regular government budget

balanced budget amendment

a constitutional amendment that requires that annual spending not exceed revenues

federal budget

a plan for the federal government's revenues and spending for the coming year

pass as you go provision

a requirment that new spending proposals or tax cuts must be offset by reductions elsewhere

grant in aid

a transfer payment one level of government makes to another

per capital

how much money each individual in the country earns

spending caps

legal limits on annual discretionary spending

federal budget spending

many entitlement programs cost the U.S. government a lot of money because they are programs that must be funded. Such programs are things like Social Security, Medicare, and Food Stamps.

3 ways that government spending may impact economy

money, minimum wage, economy

federal debt

the national devt of a coun, all the money borrowed by the federal government over the years and still outstanding

crowding out effect

the offset in aggregate demand that results when expansionary fiscal policy raises the interest rate and thereby reduces investment spending

private sector

the part of the economy that involves the transactions of individuals and businesses

public sector

the part of the economy that involves the transactions of the government

distribution of income

the way in which income is allocated among families, individuals, or other designated groups in the economy

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.

medicaid

A health care payment program sponsored by federal & state governments

line item veto

An executive's ability to block a particular provision in a bill passed by the legislature

transfer payment

Cash payments made by the government to people who do not supply goods, services, or labor in exchange for these payments. They include Social Security benefits, veterans' benefits, and welfare payments.

balanced budget

a budget is balanced when current expenditures are equal to receipts

discretionary spending

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deficit spending

Government practice of spending more than it takes in from taxes

seven major categories of spending

PC, mobile computers, servers, mainframes, super computers, game console, imbedded computers

mandatory spending

Required govt spending by permanent laws

two kinds of spending

The first kind is the purchase of goods and services. The second kind is in the form of payments to disadvantaged Americans and other people. (transfer payments)

intergovernmental expenditures

funds that one level of government transfers to another for spending

appropriations

funding that must be authorized by Congress for any federal spending