1. Chapter 10 Government Spending Section 1: Per capita per person Every man, woman, and child

2. Public sector the part of the economy made up of federal, state, local governments Began participating in the economy in the 1930s-1940s. – Teachers – Police – Firefighters – Prosecutors office – Judges

3. Private sector the part of the economy made up of non- governmental (private) individuals and businesses. – Apple – Exxon – Pepsi – LA Dodgers – Disney

4. Transfer payment revenue distribution where the government gets neither goods nor services in return…..

5. Grant-in-aid Transfer payment one level of government makes to another. – Interstate highways – Public schools

6. Distribution of income the way in which income is allocated among groups – Families – Individuals – Cities – Regions – Nations

7. CH 10, Section 2: Federal budget annual national plan Outlines – Expected revenues – Expected expenditures for the coming year.

8. Actual 2014 Budget

9. Mandatory spending government spending required by on-going law No need for annual approval of Congress. – Social Security/Medicare – Interest payments on borrowed money

10. Discretionary spending spending programs that must receive annual authorization from Congress. – Military/Coast Guard – Welfare changes COLA – Cost of Living Allowance (adjusts for inflation)

11. Fiscal year A twelve-month financial planning period. – US October 1 to September 30. – CA July 1 to June 30.

12. Federal budget surplus more national revenues than expenditures

13. Federal budget deficit more national expenditures than revenues

14. Appropriations bill an act of Congress that allows federal agencies to spend money for a specific purpose. Process involves – Congressional hearings (fact finding) – Debate of the measure – Committee vote – Congressional votes

15. Medicaid joint Federal-state medical insurance program For low-income persons

16. 1 Describe why government spending during the depression increased. Because the government was called upon to regulate – Banks – Public utilities – many other activities CH 10, sect 1, Assessments: Checking for Understanding

17. Assessment 3 Describe the per capita growth in government spending since 1940. It grew dramatically during WWII and then fell back after the war. Since that time it has grown significantly.

18. Assessment 4 List two kinds of government spending. Purchase of goods and services Transfer payments to support incomes of disadvantaged persons.

19. Assessment 5 Indentify three ways that government spending may impact the economy. It can – affect the allocation of resources – Affect the distribution of income – cause the government to compete with producers in the private sector

20. Assessments: Checking for Understanding 1 Write a definition of mandatory spending. Mandatory spending is authorized by law – Continues without the need for annual approvals by Congress.

21. Assessment 3 Describe the three stages required to establish the federal budget. Executive formulation – President and his Cabinet/advisors prepare the budget – Executive submits budget proposal to Congress Congressional Action – Reviews – Modifies – Approves budget Final approval – In which the president signs or vetoes the budget.

22. Assessment 4 List the five largest components of federal government spending. Social Security National defense Income security Medicare Net interest on the Federal Debt

23. Image, p. 256 Does the graph show any extended period of decreased government spending? Yes, following WWII.

24. Do states and local governments derive most of their monies for expenditures from revenues or from federal grants? From revenues Image, p. 257

25. Image, p. 262 From what source does the federal government receive most of its revenues? Individual income tax

26. Image, p. 263 How has spending for Social Security changed during the period from 1980 to 2004? Spending for Social Security changed very little between 1980 and 2004 – It went from 20.6 percent in 1980 to 19.8 percent in 1990, to 22.3 percent in 2004.

27. Image, p. 264 1. Which nations’ expenditures stayed at a level between 30 and 40 percent of their GDP? the United States and Japan 2. Would you agree with the statement that government spending by the United States “follows a consistent trend?” Why or Why not? Yes. Spending percentage remained at 30.35 percent throughout the period. – Showed less variance than most of the other nations’ spending.

28. What percentage of federal expenditures went to natural resources and the environment? 1.4 percent Image, p. 265