Vocab Terms for Quiz on Taxes, Spending & Debt

This set of flashcards covers important vocabulary related to taxes, spending, and debt in America, providing definitions to assist with understanding complex economic concepts.

defense spending

The part of discretionary spending that pays for the military, national security, and related defense programs.

federal deficit

The difference between the amount of money the federal government spends and the amount it takes in during a given year.

discretionary spending

Government spending, such as education, transportation, or scientific research, that Congress approves each year through the budget process.

gross domestic product (GDP)

The total value of all goods and services produced within a country in one year; it measures the size and health of a nation’s economy.

interest

The cost of borrowing money or the reward for saving it.

interest rates

The percentage charged or earned on borrowed or saved money over time.

Internal Revenue Service (IRS)

The government agency responsible for collecting federal taxes and enforcing tax laws in the United States.

mandatory spending

Government spending that is required by law, such as Social Security, Medicare, and Medicaid; Congress does not vote on it each year.

Medicaid

A government program that provides free or low-cost health insurance for people with low incomes or certain disabilities, funded by both federal and state governments.

Medicare

A federal health insurance program that helps pay for medical care for people age 65 and older or with certain disabilities.

Social Security

A federal program that provides monthly payments to retired workers, people with disabilities, and families of deceased workers, funded through payroll taxes.

tax revenue

The money the government collects from taxes on income, goods, and services.