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Government Spending
key terms
26
Economics
12th Grade
10/21/2010

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Term
per capita
Definition
per person
Term
public sector
Definition
part of the economy made up of the federal, state, and local governments
Term
private sector
Definition
part of the economy made up of private individuals and privately-owned businesses
Term
what are the two kinds of government expenditures?
Definition
1)purchase of goods and services
2)payments to disadvantaged Americans and other designated groups (transfer payments)
Term
transfer payment
Definition
a payment for which the government receives neither goods nor services in return.
Term
grant-in-aid
Definition
a transfer payment one level of government makes to another
Term
distribution of income
Definition
the way in which income is allocated among families, individuals, or other designated groups in the economy
Term
federal budget
Definition
an annual plan outlining proposed revenues and expenditures for the coming year
Term
mandatory spending
Definition
spending authorized by law that continues without the need for annual approvals of Congress
Term
discretionary spending
Definition
programs that must receive annual authorization
Term
fiscal year
Definition
a 12-month financial planning period that may or may not coincide with the calendar year
Term
federal budget deficit
Definition
excess of expenditures over revenues
Term
federal budget surplus
Definition
expenditures are less than revenues
Term
appropriations bill
Definition
an act of Congress that allows federal agencies to spend money for specific purposes
Term
medicaid
Definition
a joint federal-state medical insurance program for low-income persons
Term
balanced budget amendment
Definition
a constitutional amendment that requires that annual spending not exceed revenues
Term
intergovernmental expenditures
Definition
funds that one level of government transfers to another level for spending (largest category of state spending)
Term
deficit spending
Definition
spending in excess of revenues collected
Term
federal debt
Definition
total amount borrowed from investors to finance the government's deficit spending
Term
balanced budget
Definition
an annual budget in which expenditures equal revenues
Term
trust funds
Definition
special accounts used to fund specific types of expenditures such as social security and medicare
Term
crowding-out effect
Definition
the higher-than-normal interest rates that heavy government borrowing causes
Term
"pay-as-you-go" provision
Definition
a requirement that new spending proposals or tax cuts must be offset by reductions elsewhere
Term
line-item veto
Definition
the power to cancel specific budget items without rejecting the entire budget
Term
spending caps
Definition
legal limits on annual discretionary spending
Term
entitlements
Definition
broad social programs that use established eligibility requirements to provide health, nutritional, or income supplements to individuals
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