25 terms

Economic Principles and Practice chapter 10

Government spending
federal budget
an annual plan outlining proposed revenues and expenditures
mandatory spending
spending authorized by law that continues without the need of annual approvals of Congress; for example, interest payments on the federal debt.
discretionary spending
programs that must receive annual authorization
fiscal year
a 12 month financial planning period that may or may not coincide with the calendar year
federal budget surplus
an excess of revenues over expenditures of $117.3 billion
federal budget deficit
when the budget has shown expenditures to be larger than revenues
appropriations bill
an act of Congress that allows federal agencies to spend money for specific purposes
public sector
that part of the economy made up of local, state, and federal governments
private sector
that part of the economy made up of private individuals and businesses
transfer payment
payment for which the government receives neither goods nor services in return; includes social security, welfare, unemployment compensation, and disability payments
transfer payment from one level of government to another that does not involve compensation (ex. interstate highway construction, public schools)
government payment to encourage or protect a certain economic activity
distribution of income
way in which the nation's income is divided among families, individuals, or other designated groups
balance budget amendment
a constitutional amendments that requires that annual spending not exceed revenues
intergovernmental expenditures
funds that one level of government transfer to another level for spending
deficit spending
spending in excess of revenues collected
federal debt
the total amount borrowed from investors to finance the government's deficit spending
balanced budget
an annual budget in which expenditures equal revenues
trust funds
special accounts used to fund specific types of expenditures
crowding-out effect
the higher-than-normal interest rates that heavy government borrowing causes
pay-as-you-go provision
a requirement that new spending proposals or tax cuts must be offset by reductions
spending caps
legal limits on annual discretionary spending
broad social programs that use established eligibility requirements; includes social security, medicaid, agricultural subsidies, unemployment, and aid to the poor
per capita
on a per person basis; total divided by population
line-item veto
the power of the president to cancel specific budget items without rejecting the entire budget; declared unconstitutional in 1997