Briefly explain how the federal budget affects the national economy as well as public policy decisions.

What will be an ideal response?

The very size of the government’s financial activity inevitably makes it a strong player in the national economy. Many economists have even argued that the government can, and therefore should, use the budget to steer the economy: to boost employment, to cut inflation, to improve the nation’s balance of trade abroad, and to keep the value of the dollar secure. The budget also embodies fundamental political choices, about values—which programs get funded and which do not—and institutions, especially the relative sway of the legislative and executive branches of government.