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per capita

per person

public sector

the part of the economy made up of federal, state, and local governments

private sector

the part of the economy made up of private individuals and privately-owned businesses

transfer payment

a payment for which the government receives neither goods nor services in return


a transfer payment one level of government makes to another

distribution of income

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

federal budget

an annual plan outlining proposed revenues and expenditures for the coming year

mandatory spending

spending authorized by law that continues without the need for annual approvals of Congress

discretionary spending

programs that must receive annual authorization

fiscal year

a 12-month financial planning period that may or may not coincide with the calender year

federal budget deficit

an excess of expenditures over revenues

federal budget surplus

federal budget that shows a positive balance after expenditures are subtracted from revenues

appropriations bill

an act of Congress that allows federal agencies to spend money for specific purposes


a joint federal-state medical insurance program for low-income persons

balanced budget amendment

a constitutional amendment that requires that annual spending not exceed revenues

intergovernmental expenditures

funds that one level of government transfers 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 such as Social Security and medicare

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 elsewhere

spending caps

legal limits on annual discretionary spending


broad social programs that use established eligibility requirements to provide health, nutritional, or income supplements to individuals

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