Introduction
Who is the President?
Donald Trump
Name one of the four major spendings of the government.
National Defense
Social Security
Healthcare
Interest payments on past borrowings
What is Individual Income tax?
Tax based on incomes, of all forms, received by individuals.( Filed annually by individuals)
What is Recognition Lag?
The time it takes to determine that a recession has occurred.
(-1000 for row three)
Who is the Secretary of the Treasury?
Scott Bessent
If a country spends $500 billion and collects $400 billion in revenue, it has a $100 billion budget deficit.
What does Payroll Tax help fund? Name both
Social insurance programs, Medicare & Social Security
What is an example of an automatic stabilizer?
Progressive Income Taxes, Payroll Taxes, or Corporate Income Taxes.
What does government budgets and fiscal policy involve?
Name one
Government spending, taxation, reducing poverty, promoting growth, and stabilizing the economy.
What is budget surplus?
When the government receives more money in taxes than it spends in a year.
What is Corporate Income Tax and whats the equation used to calculate it?
Tax imposed on corporate profits based on their income
revenue-expenses=company's income
What is Discretionary Fiscal Policy?
The government passes a new law that explicitly changes overall tax or spending levels with the intent of influencing the level of overall economic activity.
What people are in charge of fiscal policy?
Name one
Executive branch, Legislative branch, President, and Secretary of the Treasury
If government savings is positive, then ____________
If government savings is negative, then ____________
Budget surplus
Budget deficit
What is an Excise Tax, name examples and purpose for it
Excise Tax is on a good or service that is deemed harmful to society
ex: alcohol, tobacco, fuels
Aim to regulate consumption of certain goods and generate revenue for the government
What is "Crowding Out?"
Where government borrowing and spending results in higher interest rates, which reduces business investment and household consumption.
Why did national parks shut down in 2013?
The Congress and the President could not agree on a budget.
What is the difference between deficit and debt?
Deficit refers to what happens to the federal government budget each year
Debt is accumulated over time- the sum of all past deficit or surpluses.
Define progressive, regressive and proportional tax
Progressive- Taxes those with higher incomes greater than those with lower income
Regressive- higher incomes pay smaller share of income tax
Proportional- flat % of income, no matter level of income
What is Implementation Lag?
The time it takes for the funds relating to fiscal policy to be dispersed to the appropriate agencies to implement the programs.