unit 8 - federal budget policies
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Unit 8 - Federal Budget Policies. The Federal Budget Deficit or Surplus i s the yearly difference between federal government expenditures and revenues. Macroeconomics. Unit 8 - Federal Budget Policies. The Federal Budget Deficit or Surplus Example 1 - PowerPoint PPT PresentationTRANSCRIPT
Unit 8 - Federal Budget PoliciesUnit 8 - Federal Budget Policies The Federal Budget Deficit or SurplusThe Federal Budget Deficit or Surplus
iis s the yearly difference between federal the yearly difference between federal government expenditures government expenditures and revenues.and revenues.
Macroeconomics
Unit 8 - Federal Budget PoliciesUnit 8 - Federal Budget Policies The Federal Budget Deficit or Surplus The Federal Budget Deficit or Surplus
Example 1Example 1If government spending in year 1 is $2,500, and If government spending in year 1 is $2,500, and government revenue is $2,000, then the deficit government revenue is $2,000, then the deficit in year 1 is $500.in year 1 is $500.
Macroeconomics
Unit 8 - Federal Budget PoliciesUnit 8 - Federal Budget Policies The Federal Budget Deficit or SurplusThe Federal Budget Deficit or Surplus
Example 2Example 2If government spending in year 2 is $2,400, and If government spending in year 2 is $2,400, and government revenue is $2,600, then the surplus government revenue is $2,600, then the surplus in year 2 is $200.in year 2 is $200.
Macroeconomics
Let’s play Let’s play Jeopardy!Jeopardy!
FederalFederalDeficitsDeficitsfor $200for $200
Macroeconomics
Unit 8 - Federal Budget PoliciesUnit 8 - Federal Budget Policies
The Federal Budget Deficit or SurplusThe Federal Budget Deficit or Surplus
Answer:Answer:This, approximately, was the U.S. federal budget This, approximately, was the U.S. federal budget deficit for the past fiscal year.deficit for the past fiscal year.What is the question?What is the question?
Macroeconomics
Unit 8 - Federal Budget PoliciesUnit 8 - Federal Budget Policies
The Federal Budget Deficit or Surplus The Federal Budget Deficit or Surplus
Question:Question:What is $1,300 billion?What is $1,300 billion?
Source: http://www.federalreserve.gov/boarddocs/testimony/2007/20070118/default.htmSource: http://www.federalreserve.gov/boarddocs/testimony/2007/20070118/default.htm
Macroeconomics
Unit 8 - Federal Budget PoliciesUnit 8 - Federal Budget Policies
The Federal Budget Deficit or Surplus The Federal Budget Deficit or Surplus
Additional websites with budget Additional websites with budget information:information:
http://www.cia.gov/http://www.cia.gov/ http://www.whitehouse.gov/omb/budgethttp://www.whitehouse.gov/omb/budget
Macroeconomics
Unit 8 - Federal Budget PoliciesUnit 8 - Federal Budget Policies The National DebtThe National Debt
is the accumulation of all yearly deficits is the accumulation of all yearly deficits minus the yearly surpluses.minus the yearly surpluses.
Macroeconomics
Unit 8 - Federal Budget PoliciesUnit 8 - Federal Budget Policies
The National DebtThe National Debt
Example 1Example 1If the deficit in year 1 is $250 billion, and the If the deficit in year 1 is $250 billion, and the deficit in year 2 is $300, and the deficit in year deficit in year 2 is $300, and the deficit in year 3 is $200, then, assuming no other deficits or 3 is $200, then, assuming no other deficits or surpluses, the total national debt is $750.surpluses, the total national debt is $750.
Macroeconomics
Unit 8 - Federal Budget PoliciesUnit 8 - Federal Budget Policies The National DebtThe National Debt
Example 2Example 2If the deficit in year 1 is $350 billion, and the If the deficit in year 1 is $350 billion, and the deficit in year 2 is $200, and the surplus in year 3 deficit in year 2 is $200, and the surplus in year 3 is $100, then, assuming no other deficits or is $100, then, assuming no other deficits or surpluses, the total national debt is $___ (fill in the surpluses, the total national debt is $___ (fill in the blank).blank).
Macroeconomics
Jeopardy!Jeopardy!
The National The National Debt Debt
for $300for $300
Macroeconomics
Unit 8 - Federal Budget PoliciesUnit 8 - Federal Budget Policies
The National DebtThe National Debt
Answer:Answer:Approximately, (within a trillion dollars) this is Approximately, (within a trillion dollars) this is the current federal debt.the current federal debt.What is the question?What is the question?
Macroeconomics
Unit 8 - Federal Budget PoliciesUnit 8 - Federal Budget Policies
The National DebtThe National Debt
The question:The question:What is $15 trillion?What is $15 trillion?Click on the following national debt clock link for Click on the following national debt clock link for updates by the second.updates by the second.http://www.brillig.com/debt_clock/
Macroeconomics
Unit 8 - Federal Budget PoliciesUnit 8 - Federal Budget Policies Financing the DeficitFinancing the Deficit
The government (in the United States, it is the The government (in the United States, it is the U.S. Treasury) finances its deficits by:U.S. Treasury) finances its deficits by:1. issuing bonds to the public (very common). 1. issuing bonds to the public (very common). 2. selling assets, such as land and buildings (not 2. selling assets, such as land and buildings (not
very common).very common).
Macroeconomics
Unit 8 - Federal Budget PoliciesUnit 8 - Federal Budget Policies
Budget PhilosophiesBudget Philosophies
Three common budget philosophies are:Three common budget philosophies are:1. The annually balanced budget1. The annually balanced budget2. The cyclically balanced budget2. The cyclically balanced budget3. Functional finance3. Functional finance
Macroeconomics
Unit 8 - Federal Budget PoliciesUnit 8 - Federal Budget Policies
The Annually Balanced BudgetThe Annually Balanced Budget
Expenditures must equal revenue within one Expenditures must equal revenue within one fiscal year.fiscal year.
Classical economists Classical economists prefer this philosophy.prefer this philosophy.It is currently state It is currently state and county law.and county law.
Macroeconomics
Unit 8 - Federal Budget PoliciesUnit 8 - Federal Budget Policies The Cyclically Balanced BudgetThe Cyclically Balanced Budget
Deficits during recessions must equal Deficits during recessions must equal surpluses during expansions.surpluses during expansions.
Keynes recommended this policy.Keynes recommended this policy.
Macroeconomics
Unit 8 - Federal Budget PoliciesUnit 8 - Federal Budget Policies
Functional FinanceFunctional Finance
Deficits and national debts are okay. The main Deficits and national debts are okay. The main objective of the government is to achieve full objective of the government is to achieve full employment.employment.
This philosophy has been This philosophy has been implemented by most industrial implemented by most industrial countries’ governments countries’ governments since WWII.since WWII.
Macroeconomics