The Federal Budget

Federal Budgets and Bonds

Multiple Choice

What is the federal budget?

• A plan for how the federal government spends taxpayers' money

• A scheme by the federal government to cheat us out of our hard earned money

• A guess by the federal government as to what they might want to spend money on

Multiple Choice

Who plays a role in developing the federal budget?

• The President and Congress

• Taxpayers and the President

• Taxpayers and Congress

• Only the President

• Only the Congress

Multiple Choice

When does the president have to submit their budget plan to Congress?

• First Monday in February

• Christmas

• New Years' Day

• April 15

Multiple Choice

When does the federal fiscal year begin?

• October 1

• January 1

• December 31

Multiple Choice

TRUE/FALSE: After Congress approves the President's budget plan, it is automatically implemented.

• True

• False

Fill in the Blank

What are the two types of spending?

Open Ended

What is Discretionary Spending? (who is it set by, what is it, what does it include)

Open Ended

What is Mandatory Spending? (who is it set by, what is it, what does it include)

Fill in the Blank

The two biggest areas of mandatory spending are

Multiple Choice

What are bonds?

• A debt-based investment

• Partial ownership in a company

• Something you get when you graduate school

Multiple Choice

TRUE/FALSE: By purchasing a bond, you are essentially lending money to the government, and they pay you interest for the loan

• True

• False

Multiple Choice

Why are bonds issued?

• To raise money to finance projects/day-to-day operations

• To increase debt

• To have investors make tons of money

Open Ended

How and where are government bonds sold?

Multiple Choice

TRUE/FALSE: U.S. treasuries are pretty risky investments

• True

• False

Multiple Choice

What is NOT one of the cons of government bonds?

• Lower rate of return

• Interest rate risk

• Occasional surprises

• Low default risks