Unit 8: Federal Budget Policies

Introduction

What’s in This Chapter? What is the difference between a federal budget deficit and a national debt? This unit defines each concept, and describes the relationship between a country’s deficit and its national debt....

Read More

Section 1: The United States Federal Budget

Deficits and Surpluses A government incurs a budget deficit when it spends more than it receives. For example, if a government spends $3,900 billion and it receives $3,300 billion from tax revenue and other sources, it incurs a...

Read More

Section 2: United States National Debt

National Debt Definition The national debt is the sum of all deficits minus the sum of all surpluses from this and previous years. The more we borrow each year, the more our debt rises. Example of a National Debt Calculation If,...

Read More

Section 3: Debts around the World

The Debt as a Percentage of Gross Domestic Product How does the United States debt compare to that of other countries? Below is a table with public debt data from selected countries around the world. Note that the public debt is...

Read More

Section 4: Deficit Financing

Financing Methods Most governments finance their budget deficits through 1. Borrowing funds from the public.  In the United States and other industrialized countries, this is the method through which governments finance the...

Read More

Section 5: Budget Philosophies

Three Budget Philosophies Economists have varying opinions about how a government budget should be managed. The three most common budget philosophies are 1. The Annually Balanced Budget. A government annually balances its budget...

Read More

Test Your Knowledge!

  Time limit: 0 Quiz-summary 0 of 10 questions completed Questions: 1 2 3 4 5 6 7 8 9 10 Information This is a ten question multiple-choice quiz covering the material in this Unit. I hope you do well! You have already...

Read More
Loading