EXAM Flashcards
Tiebout model
NO Externalities, Perfect, enough communities, complete Mobility
-All of these dont exist
Trust Fund
legal arrangements that allow individuals to place assets in a special account to benefit another person or entity.
Beneficiary
the person or entity that you legally designate to receive the benefits from your financial products.
Pension
Risk-free Securities
An investment where the return is known with certainty.
Backing of the Government
Internal Debt
the component of the total government debt in a country that is owed to lenders within the country
Federal Debt Ceiling
limit, on the total amount of debt that can be outstanding at one time
Liberty Bond Act
a debt obligation issued by the U.S. Department of the Treasury in conjunction with the Federal Reserve. Also known as a Liberty Loan, it was a war bond, issued in four installments in 1917-18 as a means to finance the U.S.’ participation in World War I and the Allied war effort in Europe
Default Risk
the risk that a lender takes on in the chance that a borrower will be unable to make the required payments on their debt obligation
Financial Market
A financial market is a market in which people trade financial securities and derivatives at low transaction costs. Some of the securities include stocks and bonds, raw materials and precious metals,
Accrual Cash
tracking income and expenses as they are incurred (when an invoice is sent or a bill received) instead of when money actually changes hands.
Subsidiarity
The principle that government responsibilities for a function should be at the lowest level of government that can deliver the function efficiently.
Fiscal Disparity
Evidence-based budgeting
Zero-based budgeting
a method of budgeting in which all expenses must be justified for each new period. Zero-based budgeting starts from a “zero base,” and every function within an organization is analyzed for its needs and costs.
Participatory budgeting
Budgets formulated with the active participation of all affected employees.
Annual Comprehensive Report (ACFR)
General Accepted Accounting (GAAP)
Funds distributed to states and local general-purpose governments by the federal government
TARP
o help stabilize the U.S. financial system, restart economic growth, and prevent avoidable foreclosures
ARRA
a massive round of federal spending intended to create new jobs and recover jobs lost in the Great Recession of 2008.
Mandatory Spending
Outlays that are made according to definitions of eligibility and benefit or payment formulas rather than directly through the appropriation process; entitlements like Social Security.
Revenue
An input; represents an inflow of money and an addition to financial resources.
Reconciliation
A mechanism for getting the year’s tax and expenditure policies to coincide with the targets in the congressional budget
Hard earmark
Funds provided by the Congress for projects, programs or grants where the purported congressional direction (whether in statutory text, report language, or other communication) circumvents otherwise applicable merit-based or competitive allocation.
Adverse selection
Pre-contractual opportunism. Involves uncertainty over asset quality from asymmetric information resulting in market failure.
Mandate
It places an expenditure requirement on a government
sequestration
Automatic cutting of appropriations if the fiscal target is violated.
Accrual accounting basis
Includes long-term liabilities, like net pension obligations.
General revenue Sharing
Funds distributed to states and local general-purpose governments by the federal government.
Grant
Transfer spending power from one level of government to another. Funds given to a lower level of government that do not have to be repaid.
Continuing resolution
Allows agencies to function when a new fiscal year begins before agency appropriation laws have been approved for the year.
standards for accounting and financial report ting
Standards for accounting and financial reporting.
Fiscal imbalance
Mismatch between need for government services and capacity to finance those services.
budget
A financial plan, including proposed expenditures and estimated revenues, for a period in the future.