Federal Budget
Definition
The Federal Budget refers to the government's plan for spending and revenue collection over a specific period (usually one year). It outlines how much money will be spent on various programs and services and how that money will be obtained through taxes, borrowing, or other means.
Analogy
Imagine you are planning a budget for your own personal expenses. You decide how much money you will allocate for different categories like food, rent, and entertainment. The Federal Budget is similar but on a much larger scale, as the government plans how to allocate funds for various sectors of the economy.
Related terms
Fiscal Policy: The use of government spending and taxation to influence the overall health and stability of the economy.
National Debt: The total amount of money that a country owes to its creditors resulting from past borrowing.
Deficit Spending: When a government spends more money than it collects in revenue during a specific period, leading to an increase in national debt.
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