ten trillion and counting

GOVERNMENT BORROWING LESSON: GLOSSARY¹

Note to Teachers: You may wish to distribute and discuss the following terms with students prior to viewing the film.

Balanced Budget: A budget for which expenditures are equal to income. Sometimes a budget for which expenditures are less than income is also considered balanced.

Bond: A debt investment in which an investor lends money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate. Bonds are used by companies, municipalities, states, and U.S. and foreign governments to finance a variety of projects and activities. (www.investotopia.com)

Budget Deficit: The amount by which the spending of a government, company or individual exceeds its income over a particular period of time.

Competitive Advantage: Condition which enables a company to operate in a more efficient or otherwise higher-quality manner than the companies it competes with, and which results in benefits accruing to that company.

Deficit Spending: The amount by which the spending of a government, company or individual exceeds its income over a particular period of time.

Economic stimulus: A tax cut and/or an increase in government spending, so called because it tends to increase aggregate demand and therefore the level of economic activity in the short run. (http://www-personal.umich.edu/~alandear/glossary/f.html)

Fiscal Policy: Decisions made by the president and Congress, usually relating to taxation and government spending, with the goals of full employment, price stability and economic growth. (http://www.businessdictionary.com)

Gross Domestic Product (GDP): A measure of economic activity in a country. It is calculated by adding the total value of a country's annual output of goods and services. (http://www.economist.com)

Inflation: The overall general upward price movement of goods and services in an economy, usually as measured by the Consumer Price Index and the Producer Price Index. Over time, as the cost of goods and services increases, the value of a dollar is going to fall because a person won't be able to purchase as much with that dollar as he or she previously could.

Infrastructure: The basic physical systems of a country's or community's population, including roads, utilities, water and sewage. These systems are considered essential for enabling productivity in the economy.

Medicaid: A program, funded by the federal and state governments, which pays for medical care for those who can't afford it.

Medicare: A federal program that pays for certain health care expenses for people age 65 or older.

Monetary Policy: The regulation of the money supply and interest rates by a central bank, such as the Federal Reserve Board in the U.S., in order to control inflation and stabilize currency. (http://www.investorwords.com)

National Debt: The sum of all previously incurred annual federal deficits. Since the deficits are financed by government borrowing, national debt is equal to all government debt outstanding.

Recession: Broadly speaking, a period of slow or negative economic growth, usually accompanied by rising unemployment. (economist.com)

Social Security: The comprehensive federal program of benefits providing workers and their dependents with retirement income, disability income and other payments. The Social Security tax is used to pay for the program.

Trillion: The number represented as one followed by 12 zeros; a million million. (freedictionary.com)

¹ Unless otherwise noted, the source of definitions is investorwords.com.