5.4: Government Deficits and National Debt

Question 1

What’s the tradeoff of increasing gov. spending w/o raising taxes

Answer 1

deficit spending

Question 2

Budget Deficit

Answer 2

when annual gov. spending and transfer payment is greater than tax revenue

Question 3

Budget Surplus

Answer 3

when annual gov. spending and transfer payments are less than tax revenue

Question 4

National Debt

Answer 4

the accumulation of all budget deficits over time

Question 5

If the gov. increases spending w/o increasing taxes over time they will do what?

Answer 5

Increase the annual deficit and the national debt

Question 6

Entitlements

Answer 6

a federal program that requires payment to any eligible person or unit of government . This mandatory spending must be paid.

Mandatory programs + net interest