Government Budget
Define budget deficit
When the government doesn't have enough money to cover their expenses
Give an example of something that falls under public good
Funding for national parks, infrastructure, public transportation, buses, subways, health services such as free vaccinations
What is one main category government spending is divided into?
Mandatory, discretionary, or supplemental
If you were in charge of spending on the public good, how would you categorize what to spend on?
Personal preference
Define budget surplus
When the government has more than enough money to cover expenses
Define public good
What is a subcategory that could fall under discretionary spending?
Why must a public good be both non-rivalrous and non-excludable?
It needs to provide as fairly for the people as possible
When was the last government deficit?
2023
Explain the importance of the public good
It can help to supplement people, giving services that otherwise wouldn't be able to be provided
What is a type of spending that could be considered mandatory?
Something the government is required by law to spend on, such as Medicare and Social Security
How would the government determine if a specific service could be considered a public good?
Decide who it will affect, research how it will affect people, and decide whether it will be worth the cost.
Why is it important for the government to have a budget?
They need to know what they can spend on, and allocate money to different spending categories accordingly
What is the difference between non-rivalry and non-excludability?
Non-exclusive means that everyone can use the service, non-rivalrous means that by using the service, it doesn't negatively impact others
What type of spending would be considered supplemental?
Anything that isn't occurring at the beginning of the fiscal year, such as helping with recovery from COVID-19
Why is so little of the government's budget allotted to the public good?
They first need to spend on other things, as required by law or as needed by the country, before they can start spending on the public good