The Role of Government: The Federal Government and Fiscal Policy


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flagStudents will visit "A Citizen's Guide to the Federal Budget" and use the federal government web site to obtain information which will help them understand basic information about the budget of the United States Government for the current fiscal year.


In this lesson you will define and describe the Federal Budget, and learn what percentage of GDP is used for government spending in the United States and other industrialized countries. You will also know which branch of the federal government is responsible for preparation of the Federal Budget, identify the major categories of government revenue and the major categories of government expenditures, list "non-defense discretionary expenditures", and know the difference between Medicare and Medicaid.


Visit the website  and review the data.

Review the Table of Contents and answer the questions below. 

  1. In your own words write a brief paragraph which summarizes the United States Budget.
  2. Use Chart 1-2 to respond to the following: In 1998, or the last year charted, which of the industrialized nations allocated the smallest share of its GDP to government spending (federal, state, and local combined)?
  3. Which industrialized nation allocated the highest percentage of GDP to government spending?
  4. Which branch of the federal government, Executive, Legislative, or Judicial, is responsible for the preparation of the Federal Budget?
  5. What government official is ultimately responsible for the preparation and submission of the Federal Budget?

Move forward and read Where the Money Comes From- and Where it Goes.

  1. In your own words, write a paragraph about how the federal government plans its budget.
  2. List government revenues by category beginning with the largest percentages.
  3. What is the estimated about of money that the federal government takes in each year?

  4. List government expenditures by category beginning with the largest percentages.
  5. What expenditures are classified as "Non-Defense Discretionary"?
  6. Who are the beneficiaries of Medicare and who are the beneficiaries of Medicaid?
  7. What is the difference between Medicare and Medicaid?
  8. What is the estimated amount that the federal government spends during the fiscal year when it received $2,000 billion?
  9. What priorities is the President dealing with through on and off budget items?
  10. Have these issues been important in the 2000 elections? Describe.