Question

The federal government's budget is mainly

a. a policy statement that allocates burdens and benefits by attaching price tags to policy goals
b. a list of the ways in which the government has spent its money
c. a technical document intended to ensure that tax revenues will be sufficient to meet expenditures
d. a line by line accounting of tax expenditures that is required annually by the Constitution
e. an accounting tool that permits the government to keep track of its assets and liabilities

Answer 1

The federal government's budget is primarily a policy statement for allocating burdens and benefits, reflecting the president's policy goals, with a focus on receipts and expenditures. It is tied to fiscal policy, which includes spending, taxation, and borrowing, and can lead to a budget deficit, surplus, or balanced budget.

Step-by-step explanation:

The federal government's budget is primarily a policy statement that allocates burdens and benefits by attaching price tags to policy goals. The budget represents the president's policy objectives and indicates the administration's priorities for the upcoming fiscal year. It is composed of receipts (anticipated taxes and other revenue sources) and expenditures (expected government spending). Major categories of federal spending include national defense, Social Security, healthcare, and interest payments, which account for about 70% of all federal spending.

Fiscal policy is crucial in understanding government budgets; it encompasses federal government spending, taxation, and borrowing. The budget can reflect a deficit if spending exceeds tax collection, a surplus if more taxes are collected than spent or be balanced if the two are equal. Over time, deficits and surpluses cumulate to form the national debt. It's important to note that government budgets can change significantly over short periods due to policy decisions and unforeseen events that disrupt earlier fiscal plans.