Government Spending

What is the major component of government spending?

• Income Tax

• Transfer Payment

• Government borrowing

• fiscal deficit

----------- is the money that all governments federal, state, and local-spend to pay employees and to buy things for their own use like paper clips, fire engines, and military weapons.

(a)  

------- is a one-way payment to a person or organization which has given or exchanged no goods or services for it

(a)  

---------- is when a government's expenditures exceed its revenues during a fiscal period, causing it to run a budget deficit.

(a)  

what is the sources of public debt

• transfer payment

• Government securities

• collateral

• expenditure

Can the government run conventionally-measured budget deficits forever?

• Yes

• No

----------- refers to funds that are used by a company for the purchase, improvement or maintenance of long-term assets to improve the efficiency or capacity of the company.

(a)  

Transfer payments do not include subsidies paid to

• exporters

• unemployment

• education

• disability

When a government it spending more money than it is making, it is operating in a...

• deficit

• surplus

• IOU

• interest

On which of the following does the government spend the largest portion of its budget?

• Medicare

• Defense

• Social Security

• Education