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Unformatted text preview: CHAPTER 16 Economic Policy IMPORTANT TERMS *budget A document that announces how much the government will collect in taxes and spend in revenues and how those expenditures will be allocated among various programs. *budget deficit A situation in which the government spends more than it takes in, thus pumping more money into the economy. *budget resolution A total budget ceiling and a ceiling for each of several spending areas submitted by the Budget Committees in the House and Senate to their respective chambers. These resolutions serve as targets to guide the work of each legislative committee as it decides what should be spent in its area. *budget surplus A situation in which the government takes in more money than it spends, thus draining money out of the economy. Congressional Budget Act of 1974 The law that altered the procedures by which Congress enacts the national budget. The Congressional Budget Office was established as a nonpartisan congressional agency. Budget committees were created in both houses, which then submitted to each house a resolution proposing a total budget ceiling and a ceiling for each of several spending areas. Once these resolutions were adopted, individual appropriations were decided. Congress then adopted a second resolution reconciling the budget ceiling with individual appropriations bills. Council of Economic Advisers (CEA) A group of three professional economists who give the president expert advice on the economy. Created in 1946, it is responsible for forecasting economic trends, analyzing economic issues, and helping prepare the economic report the president submits each year to Congress. Since the president selects the CEAs membership, its recommendations usually reflect the ideological preferences of the president. *economic planning...
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- Spring '09