Question

What are the main categories of U.S. federal government spending?

Short answer

The main areas of federal spending are national defense, Social Security, healthcare, and interest payments.

Step-by-step solution

Step 1.Concept of fiscal policy

Governments' tax and spending actions are referred to as fiscal policy. The official and administrative parts of the legislature in the United States dictate national fiscal policy.

The goal of most government policies in an economy is to focus on the absolute volume of spending, the all-out arrangement of expenditure, or both. Changes in government spending tactics or government tax strategies are the two most commonly used tools for changing fiscal policy.

Step 2. Explanation

Government expenditure and cost changes aren't a part of monetary strategy or fiscal policy. Increased spending or a higher duty rate is a money-related game plan that is implemented to modify the current economic situation.

When federal expenditure and taxation are not a part of fiscal policy, for example:

-

Government expenditure in the United States increased after $$9$ / $11$$, and to fund this increased spending, the government had to dip into its own wage pool. This spending isn't part of the monetary policy or fiscal policy.

Step2. Explanation

When federal expenditure and taxation are part of fiscal policy, for example:

In mid-$2009$, the US government, led by President Barack Obama, signed a $$830$billion expansionary agreement, which includes both tax cuts and increased government spending. This government development is a piece of financial method change because it was done to surrender a lift to the economy, which was in a deep decline.