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17 Cards in this Set

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What are the 3 basic budget philosophies?
[1] Annually Balanced budget
[2] Cyclically Balanced budget
[3] Functional Finance
Primary purpose is to provide for non-inflationary full employment to balance the economy rather than the budget.
Functional Finance
Annually or cyclically balanced budget is secondary in concern.
What is Functional Finance?
Primary purpose is to provide for non-inflationary full employment to balance the economy rather than the budget.
Annually or cyclically balanced budget is secondary in concern.
What is a Cyclically Balanced budget?
Balanced over the course of a business cycle
Does not have to be budgeted annually
Balanced over the course of a business cycle.
Cyclically Balanced budget
Does not have to be budgeted annually
What is an issue with Annually Balanced Budget?
Not compatible with Gvnmt as a countercyclical, stabilizing force.
Once viewed as the goal of public finance.
Not compatible with Gvnmt as a countercyclical, stabilizing force...?
Annually Balanced Budget
Once viewed as the goal of public finance.
What are 2 major false concerns of public debt?
Banruptcy, and burdening future generations.
Why is public debt and Bankruptcy not an issue?
List 2 reasons:
Refinancing-public debt is easily refinanced.
Taxation-Authority to levy and collect taxes.
Why is public debt and Burdening future generations not an issue? List 2 reasons, and 1 danger:
[1] U.S. owes a substantial amount portion of public debt to itself.
[2] Public debt is both a liability and an asset to Americans
[3] FOREIGN DEBT, 18% doesn't go back to the US economy.
Owe to whom?
Good and bad
Italy?
Income distribution is an example of what issue?
Substantive
When the distribution of securities is highly uneven, it's known as...
Income distribution
18% of this debt is an economic burden to U.S. citizens...
Foreign owned public debt
Large public debt results in high real interest rates, which reduce private investment spending, which leaves future generations with a smaller production capacity and a lower standard of living, is known as these 2 terms:
Crowding out effect and stock of capital
What effect does Crowding out effect and stock of capital have?
Large public debt results in high real interest rates, which reduce private investment spending, which leaves future generations with a smaller production capacity and a lower standard of living
Pay down the public debt is one example of what to do with a...
Budget surplus
Increase Federal Expenditures is one example of what to do with a...
Budget surplus