Government Spending and Fiscal Policy

The video tutorial explains the two main categories of government spending: discretionary and mandatory. Discretionary spending is flexible and determined annually by Congress, covering areas like national defense and education. Mandatory spending is dictated by law and includes Social Security and Medicare. The video highlights the importance of these categories in fiscal policy and their impact on the economy.

What are the two main categories of government spending?

• Discretionary and Optional

• Mandatory and Optional

• Discretionary and Mandatory

• Essential and Non-essential

Which of the following is a characteristic of discretionary spending?

• It is determined by permanent laws.

• It is flexible and decided annually by Congress.

• It is not subject to annual budget processes.

• It is automatically funded without congressional approval.

Which of the following is NOT an example of discretionary spending?

• Education

• Transportation

• National parks

• Medicare

What happens if Congress fails to agree on a discretionary budget?

• All government spending is increased.

• Mandatory spending is halted.

• The government continues to operate normally.

• The government goes into shutdown.

What is a consequence of a government shutdown related to discretionary spending?

• All government employees are paid.

• Discretionary programs are unfunded.

• National parks remain open.

• Mandatory programs are halted.

Which of the following is an example of mandatory spending?

• National defense

• Transportation

• Education

• Social Security

What is required to change a component of mandatory spending?

• A presidential executive order

• A change in law

• A new budget proposal

• A congressional debate

Which type of spending makes up a larger portion of the government budget today?

• Mandatory spending

• Emergency spending

• Discretionary spending

• Optional spending

In the 1970s, which type of spending was a larger percentage of the budget?

• Emergency spending

• Mandatory spending

• Optional spending

• Discretionary spending

What is a key tool of fiscal policy discussed in the video?

• Discretionary spending

• Emergency spending

• Mandatory spending

• Optional spending