1. Section Outline 1 of 6 Public Finance Section 3: Government Policy and Spending I.Spending Policy Goals II.Types of Government Budgets III.Federal Government Spending Section Reading Support Transparency

2. 2 of 6 Public Finance Section 3: Government Policy and Spending Main Idea Governments try to develop budgets to spend their tax revenues in a way that will benefit the economy. Key Terms Balanced budget Deficit budget Surplus budget Entitlement program

3. Spending Policy Goals The Goals of Government Economic Stability Policies —Promote economic growth —Maintain stable prices —Ensure full employment 3 of 6 Public Finance Section 3: Government Policy and Spending

4. 4 of 6 Public Finance Section 3: Government Policy and Spending Types of Government Budgets Balanced Budget —Requires that the government does not spend more than the tax revenues received Deficit Budget —A budget where the government spends more than the tax revenues received Surplus Budget —A budget where the government spends less than the tax revenues received

5. 5 of 6 Public Finance Section 3: Government Policy and Spending Federal Government Spending National Priorities —The government has two options to control spending: Increase/decrease taxes Increase/decrease spending Spending Patterns —Entitlement benefits programs provide benefits to people who are entitled by law to receive them.

6. Public Finance: Section 3 Section Reading Support Transparency 6 of 6