Government Revenue and Expenditures Flashcards
Government Revenue and Expenditures
investments in emergency preparedness (pandemics/ neutral disasters)
-transfers money to healthcare costs (impact times of sugeries and access to doctors
-amount of tax on income
-tax breaks (post-secondary education tax credits
National matters like defense ans security, international trade, citezenship, immigration, and the environment
Name two responsibilities at the provincial/territorial level.
-healthcare delivery
agriculture
transportation
-education
Name two responsibilities at the municipal (or local) level.
local concerns: garbage/recycling, water, and playgrounds
Explain expenses and revenue in your own words and provide examples.
Expenses: government spending money; federal government uses taxes and other forms of income and profits to pay for these expenses (revenue).
Would you rather have a surplus or a deficit? Why?
A surplus occurs when you have more revenue than and deficit would be the opposite.
Usually it’s better to be in a surplus but sometimes a government has to be in a deficit to compensate for the economic gap/shortfall.
Explain the terms deficit
A deficit occurs when a government’s spending exceeds its revenue (income) during a specific period, typically a fiscal year. In other words, the government is not able to cover all its expenses with the revenue it collects. To make up for the shortfall, the government may borrow money by issuing bonds or taking out loans.
debt
Debt, on the other hand, is the accumulation of deficits over time. It is the total amount of money that a government owes to external creditors and domestic lenders. Each year a government runs a deficit, it adds to its overall debt. Conversely, if a government runs a surplus (where revenue exceeds spending), it can use the surplus to reduce the overall debt.
relationship between debt and deficiet
The relationship between deficit and debt is that deficits contribute to the accumulation of debt. When a government consistently runs budget deficits, it borrows money to cover the gap between its spending and revenue. Over time, these annual deficits add up, leading to an increase in the total debt.
Why is borrowing money necessary at times?
Governments often use borrowing as a tool to finance infrastructure projects, stimulate the economy, or address budget shortfalls during challenging times. However, a high and continuously growing debt-to-GDP ratio can raise concerns about a government’s ability to meet its financial obligations and may have long-term economic implications.
What are transfer payments? Provide examples.
Transfers are any payments that go directly to people, provinces, and territorial governments, organizations. Transfers to persons are the largest category (elderly benefits, employment insurances, children benefits, canada health program, canada social program, equalization program)
What are program expenses? Provide examples.
Cost to operate more than 130 federal departments, agencies, and crown corporations
What are interest payments?
Interest on the debt, interest charges on the money the government has not yet payed.
What are the different types of tax revenue collected by the federal government?
-personal income tax-is all the money collected from individual canadian and is based on money they earn from jobs or investments
-corporate income tax-is any money collected from businesses (based on profits or how much they make)
-goods and services tax (GST); Own sales tax HST
-Other taxes; import duties, fuel taxes, duties on alcohol and tobacco
Who is required to pay into the fund for Employment Insurance Premiums? What is the purpose of Employment Insurance Premiums?
-Employees and employers both have to pay these premiums to help cover the cost for canadians looking for work or are unable to work
What are crown earnings? Provide some examples.
-Federal government establishes businesses call crown corporations and they generate revenue from the sales of goods and services to individuals outside of the government; Canada post, CBC
