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Federal Budget Basics
Spending Types
Government Programs
Deficits & Debt
Fiscal Policy
100

This is the official term for the government’s plan for spending and revenue in one fiscal year.

What is the federal budget?

100

This type of spending is required by law and doesn't need annual approval.

What is mandatory spending?

100

The largest federal entitlement program.

What is Social Security?

100

When government spending exceeds revenue in a single year.

What is a budget deficit?

100

Government's use of spending and taxes to influence the economy.

What is fiscal policy?

200

This term refers to the 12-month period used for federal government accounting.

What is a fiscal year?

200

Social Security is an example of this kind of spending?

What is entitlement or mandatory spending?

200

This program provides healthcare to the elderly. 

What is Medicare?

200

The total amount of money the government owes.

What is the national debt?

200

Fiscal policy used to fight inflation involves cutting spending or raising taxes.

What is contractionary policy?

300

This level of government pays the most for elementary and secondary education.

 What is local government?

300

This type of program requires recipients to meet income limits.

What is means-tested?

300

This program provides healthcare to low-income individuals.

What is Medicaid?

300

This is the legal cap on how much the government can borrow.

What is the debt ceiling or debt limit?

300

Cutting taxes and increasing spending is this type of fiscal policy.

What is expansionary policy?

400

The largest source of revenue for the federal government.

What is income taxes?

400

Payments made without goods or services in return.

What are transfer payments?

400

Eligibility for these programs is guaranteed if criteria are met.

What are entitlement programs?

400

This happens to the national debt during years of deficit.

What is it increases?

400

These built-in policies help reduce economic fluctuations without new laws.

What are automatic stabilizers?

500

The type of spending Congress reviews and decides on annually.

What is discretionary spending?

500

Discretionary spending includes these two major areas.

What are defense and education?  

  • National Defense: The largest single category, including the Pentagon and military spending. 
  • Education: Funding for various education programs, including Pell grants for low-income college students and grants for K-12 schools with large numbers of low-income students. 
  • Transportation: Funding for highways, bridges, and airports, as well as mass transit projects. 
  • Scientific Research: Funding for the National Institutes of Health (NIH) and the National Science Foundation (NSF). 
  • Social Services: Programs like Head Start, public housing, and food assistance programs. 
  • Homeland Security: Funding for border security, law enforcement, and other related activities. 
  • Research: Funding for scientific research through agencies like the NIH and NSF. 
  • Infrastructure Development: Funding for projects like highways, bridges, and airports. 
500

Unemployment insurance is considered this type of payment.

What is a transfer payment?

500

This type of budget plans to match spending with revenues.

What is a balanced budget?

500

This is the biggest challenge in applying fiscal policy effectively.

What is the time lag?