Government Budget and Taxation

These flashcards cover key concepts regarding government budgeting, taxation policies, and their implications on the economy.

What is a balanced budget?

A balanced budget occurs when the revenue the government receives is equivalent to its government spending.

What is a budget deficit?

A budget deficit happens when the government spends more than what it earns.

What is a budget surplus?

A budget surplus is when the government earns more than what it spends.

What is government debt?

Government debt is the accumulation of budget deficits over time.

What are Treasury bills (T Bills)?

Treasury bills are government issued bonds that serve as loans/promissory notes that the government will pay back plus interest.

What are the pros of welfare spending?

Welfare spending helps low-income households but can contribute to national debt.

What types of taxes are included in taxation policy according to the lecture notes?

Income tax, Sales tax, Wealth tax, Corporate taxes, Property tax, Capital gains tax, Payroll taxes.

What is a trade deficit?

A trade deficit occurs when the monetary value of imports is greater than that of export revenue.

What is a trade surplus?

A trade surplus is when there is greater export revenue than the value of imports.

What role does the Federal Reserve play in the economy?

The Federal Reserve can raise or lower the money supply and adjust interest rates accordingly.

What are tariffs?

Tariffs are taxes on foreign imports that indirectly restrict the quantity of imports.