Question

Allocate the following expense items of the U.S. government into the mandatory, discretionary, and interest categories of the government budget. a. $1,000 of income for the Human Fund for owning a $100,000 savings bond b. Food stamps received by the Jones family c. Purchase of F-16 fighter planes by the U.S. government d. An increase in the salary of researchers at the National Institutes of Health e. Government aid to help victims of drought in east Africa

Answer 1

Answer:

a. $1,000 of income for the Human Fund for owning a $100,000 savings bond - This is an example of the debt interest in the budget.

b. Food stamps received by the Jones family -  These are mandatory that has to be spent by the government.

c. Purchase of F-16 fighter planes by the U.S. government -  Purchasing F-16 is discretionary.

d. An increase in the salary of researchers at the National Institutes of Health - Increase in the salary is discretionary expenditure by the government.  

e. Government aid to help victims of drought in east Africa - This will be discretionary.

Definition of the categories of US government budget

Mandatory spending is spending required by statutory criteria, it is not authorized annually

Discretionary spending is spending that must be authorized annually and appropriated by the House and Senate.

Interest on debt is the cost incurred by an entity for borrowed funds