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Vocabulary: Fill in the Blank
Vocabulary: What's the word?
Understanding Concepts
Understanding Concepts: Double Trouble
100
Congress passes a _______ to fund government agencies during long budget negotiations.
Continuing resolution
100
What is public debt?
All of the money borrowed by the government and not yet repaid, plus the accrued interest on that money;also called the national debt or federal debt.
100
What two major events marked a dramatic change in the amount of federal spending and its impact on the nation’s economy?
The Great depression of the 1930's and then World War 2 in the early 1940's
100
(a) What is the difference between uncontrollable and controllable spending? (b) About what percentage of the annual budget is controllable?
(a) Uncontrollable spending is spending that Congress and the President have no power to change directly, controllable spending is the amount of money that Congress and the President determine that will be spent each year on many individual government expenditures (environment protection programs, aid to education, etc) (b) 20%
200
The government lays a(n) ________ on the manufacture, sale, or consumption of goods.
Excise tax
200
What is a regressive tax?
A tax levied at a flat rate, without regard to the level of a taxpayer’s income or ability to pay them.
200
What are the four expressed limitations on the Federal Government’s power to tax?
Must be for public use only. May not be used on exports. Direct taxes must be equally apportioned among states. Indirect taxes must be a set rate,nation wide.
200
(a) Which federal tax raises the largest amount of money each year? (b) How did the Federal Government gain the power to levy that tax?
(a) The Income Tax (b) It was authorized by the 16th Amendment
300
The Federal Government creates a budget _________ when it spends more money in one year than it takes in.
Deficit
300
Define uncontrollable spending.
Spending that Congress and the President have no power to change directly.
300
What is the largest item on which the Federal Government spends the money it raises?
Entitlements (Department of Health and Human Services)
300
(a) Approximately what percentage of federal spending now goes to pay the interest on the public debt? (b) If the government continues to run a deficit each year, what effect will that have on that percentage figure?
(9) 9% (b) The national debt will be increased
400
Congress can decide how much money to spend each year on programs that are considered ________(s).
Controllable spending
400
What is an entitlement?
A benefit that federal law says must be paid to all those who meet the eligibility requirements
400
What is the one implied limitation on the power to tax?
The Federal Government cannot tax the states or any of their local governments in the exercise of their governmental functions. That is, they cannot tax for public services.
400
(a) Over the past seventy years, has the Federal Government most often ended in a fiscal year with a surplus or a deficit? (b) Describe trends in the federal budget deficit since 2000.
(a) Deficit (b) The deficit has plummeted to $400 billion
500
Employers withhold a(n) ___________ from each paycheck.
Payroll tax
500
Define both deficit and surplus.
A deficit is the yearly shortfall between revenue and spending;surplus is more income than spending
500
According to the critics of deficit financing, who will pay the costs of that practice?
The future generations
500
(a) Describe the different methods the Federal Government can use to borrow money. (b) Why does the Federal Government find it fairly easy to borrow money?
(a) T-bills: short-term borrowing Bonds: long-term borrowing (b) No Constitutional limit