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Government Purchases of Goods and Services
Government spending on new goods and services
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Public Good
A good (or service) provided for all of society; no one is excluded from use of a public good
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Quasi-Public Good
A government provided good that could be sold in a private market
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Transfer Payments
Money from the government for which no direct work is required in return.
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Social Insurance Program
Contributions from an individual's wages are made to a fund from which that individual may draw when eligible for benefits.
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Progressive Tax
A tax reflecting a direct relationship between the percentage of income taxed and the size of the income.
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Proportional Tax (Flat Tax)
A tax equal to the same percentage of income regardless of the size of the income.
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Regressive Tax
A tax reflecting an inverse relationship between the percentae of income taxed and the size of the income.
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Tax Reform
Changes in tax policies and structures.
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Tax Bracket Indexation
A policy of adjusting income tax brackets to account for inflation.
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Tax Reform Act of 1986
Major legislation that changed federal income tax exemptions, deductions, brackets and rates.
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Tax Base
The particular thing on which a tax is levied.
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Tax Rate
The amount that is levied on the base.
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Tax Abatement
A policy of reducing or eliminating a tax that would normally be charged.
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Fiscal Policy
Influencing the levels of aggregate output and employment or prices through changes in federal government purchases, transfer payments and or taxes.
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Discretionary Fiscal Policy
Deliberate changes in government expenditures and/or taxes to control unemployment or demand-pull inflation.
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Automatic Fiscal Policy (Automatic Stabilization)
Changes in government expenditures and/or taxes that occur automatically as the level of economic activity changes; helps to control unemployment or demand-pull inflation.
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Balanced Budget
A government's total expenditures equal its total revenues.
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Surplus Budget
A government's revenues are greater than its expenditures.
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Deficit Budget
A government's expenditures are greater than its revenues.
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Unified Budget
A budget that assembles all federal government receipts and outlays, and the resulting overall deficit or surplus, in one report.
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Trust Fund
A restricted fund; payments from this fund are specified as to recipents and/or uses.
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Entitlement
Programs set up by the government to pay benefits to people who meet the eligibility requirements of the programs.
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On Budget/Off Budget
Categories of the unified budget established by Congress; generally refers to programs that have immediately controllable and noncontrollable receipts and expenses, respectively.
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Public Choice
The study of the economic motives and attitudes of voters and public officials and how those motives and attitudes affect government decision making.
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National Debt
The accumulation total debit of the federal government due to deficit spending.
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U. S. Treasury Security
Issued by the federal government in return for funds lent to it.
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U. S. Treasury Bill, Note, and Bond
U. S. Treasury securities that mature, respectively, in one year or less; one to ten years; and 10 or more years.
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Treasury Inflation Protected Securities (TIPS)
U. S. Treasury securities with face values that rise when the economy experiences inflation.
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Debt Service
The cost of maintaining a debt; generally measured in interest costs.
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Crowding Out
Occurs when borrowing by the federal government reduces borrowing by households and businesses.
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