Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
16 Cards in this Set
- Front
- Back
|
deficit
|
shortfall of revenues under payments
|
|
|
surplus
|
an excess of revenues over payments
|
|
|
Social Security System
|
a social insurance program that provides financial benefits to the elderly and disabled and to their eligible dependents and/or survivors
|
|
|
structural deficit
|
the part of a budget deficit that would exist even if the economy were at its potential level of income.
|
|
|
passive deficit
|
the part of the deficit that exists because the economy is operating below its potential level of output.
|
|
|
nominal deficit
|
the deficit determined by looking at the difference between expenditures and receipts.
|
|
|
real deficit
|
the nominal deficit adjusted for inflation.
|
|
|
debt
|
accumulated deficits minus accumulated surpluses.
|
|
|
Three reasons gov't debt is different from individual debt.
|
1. The gov't lives forever; people don't.
2. The government can print money to pay its debt; people can't. 3. Government owes much of its debt to itself - to its own citizens. |
|
|
internal debt
|
gov't debt owed to other governmental agencies or to its own citizens.
|
|
|
external debt
|
gov't debt owed to individuals in foreign countries.
|
|
|
debt service
|
the interest rate on debt times the total debt.
|
|
|
cash flow accounting system
|
an accounting system entering expenses and revenues only when cash is received or paid out.
|
|
|
pay-as-you-go system
|
payments to current beneficiaries are funded through current payroll taxes.
|
|
|
Policies that would help to match real production to real expenditures in 2020.
|
1. Increase taxes on workers to reduce their consumption.
2. Reduce Social Security payments to reduce consumption by retirees. 3. Increase the retirement age to 72 to increase real production. |
|
|
Financing the Deficit
|
-the gov't finances its deficits by selling bonds to private individuals & the Fed.
-Bonds=promises to pay back the money in the future. -The Fed can print an unlimited amount of money but too printing can lead to inflation. |
