Vocabulary
- per capita- per person
- public sector- the part of economy made up of federal, state, and local governments
- private sector- the part of the economy made up of private individuals and privately-owned businesses
- transfer payments- a payment for which the government receives neither goods nor services in return
- distribution of income- the way in which income is allocated among families, individuals, or designated groups
- federal budget- an annual plan outlining proposed revenues and expenditures for the coming year
- mandatory spending- spending authorized by law that continues without the need for annual approval from Congress
- discretionary spending- programs that must receive annual authorization
- federal budget deficit- an excess of expenditures over revenues
- federal budget surplus- expenditures less than expenditures
- medicaid- a joint federal-state medical insurance program for low-income persons
- balanced budget amendment- a constitutional amendment that requires that requires that annual spending not exceed revenues
- intergovernmental expenditures- funds that one level of government transfers to another level for spending
- deficit spending- spending in excess o revenues collected
- federal debt- the total amount borrowed from investors to finance the government's deficit spending
- balanced budget- an annual budget in which expenditures equal revenues
- trust funds- special accounts used to fund special types of expenditures
- crowding-out effect- the higher-than-normal interest rates that heavy government borrowing causes
- "pay-as-you-go" provision- a requirement that new spending proposals or tax cuts must be offset by reductions elsewhere
- line-item veto- the power to cancel specific budget items without rejecting the whole budget
- spending caps- legal limits on annual discretionary spending
- entitlements- broad social programs that use established eligibility requirements to provide health, nutritional, or income supplements to individuals