Section Outline

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Public FinanceSection 3: Government Policy and Spending

I. Spending Policy Goals

II. Types of Government Budgets

III. Federal Government Spending

Section Reading Support Transparency

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Public FinanceSection 3: Government Policy and Spending

Main Idea

Governments try to develop budgets to spend

their tax revenues in a way that will benefit the

economy.

Key Terms

•Balanced budget

•Deficit budget

•Surplus budget

•Entitlement program

Spending Policy Goals

•The Goals of Government Economic Stability Policies— Promote economic growth— Maintain stable prices— Ensure full employment

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Public FinanceSection 3: Government Policy and Spending

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Public FinanceSection 3: Government Policy and Spending

Types of Government Budgets

•Balanced Budget— Requires that the government does not spend more than the tax revenues

received

•Deficit Budget— A budget where the government spends more than the tax revenues received

•Surplus Budget— A budget where the government spends less than the tax revenues received

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Public FinanceSection 3: Government Policy and Spending

Federal Government Spending

•National Priorities— The government has two options to control spending:

• Increase/decrease taxes• Increase/decrease spending

•Spending Patterns— Entitlement benefits programs provide benefits to people who are entitled by law

to receive them.

Public Finance: Section 3Section Reading Support Transparency

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