Questions and Answers
What is a likely budget proposal from the new presidential administration regarding entitlement programs?
What conclusion can be drawn from the graph about government spending?
The federal government has almost always spent more than it receives.
Why does the government impose excise taxes?
To discourage the use of specific products.
When might workers be exempt from paying income taxes?
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What is fiscal policy?
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What kind of taxes are represented by the descriptions given?
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What made up half of the government's expenditures based on the chart?
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What is money spent on government programs referred to as?
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How might the government respond to rising threats to national security through fiscal policy?
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What is a difference between payroll and income taxes?
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Study Notes
Fiscal Policy Overview
- Fiscal policy encompasses government strategies for taxation and spending.
- Increasing spending on entitlement programs, like Social Security, is often a campaign promise for new administrations.
Government Spending Insights
- The federal government typically incurs a budget deficit, spending more than its revenue.
- Major categories of government expenditures include Social Security and Education/Health and Human Services, which comprise half of total spending.
Taxation Types and Purpose
- Excise taxes are utilized to discourage the consumption of certain products, in addition to raising revenue.
- Payroll taxes are deducted directly from employee paychecks, while income taxes are calculated based on total earnings.
Tax Exemptions and Thresholds
- Workers may be exempt from income taxes if their earnings fall below a specified threshold.
Responses to Security Threats
- In response to heightened national security threats, the government may increase military spending as a fiscal policy measure.
Key Definitions
- Government expenditures refer specifically to money allocated for various programs and services.
- Understanding the difference between payroll and income taxes is vital; payroll taxes arise directly from wages, whereas income taxes reflect an individual's overall earnings.
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Description
Test your knowledge of fiscal policy concepts with these flashcards. Each card presents essential terms and definitions that are fundamental for understanding government budgeting and entitlement programs. Perfect for students looking to reinforce their grasp of fiscal policy.
