GOV 2305 Exam 4
Terms in this set (47)
a system of production and consumption of gods and services allocated through exchanges
Means of Production
These are the tools and resources necessary to produce goods and services
System where the means of production are owned by private citizens under competitive conditions
Laissez-faire capitalism and Adam Smith
LF promoted by Smith in Wealth of Nations. Idea that free markets produce the best outcomes when left to self-regulate by the 'invisible hand" or the profit motive.
Proposed by Karl Marx, a system where gov't own all the means of production and manages economic decisions for everyone.
System where gov't own some means of production and guarantees a minimal standard of living to everyone.
The mean means of production are privately owned, but with government regulations to promote efficiency and equity.
The output of goods and services is maximized given the amount of input it took to produce them.
Economic transaction are fair to all parties involved
idea that some industries have effectively taken over regulators intended to protect the public from those industries.
right of workers to negotiate w/ employers as a group
financial aid to stabilize farmers' incomes and food prices
Goods and Services that producers are willing and able to sell
Goods and services that consumers are wiling and able to buy
Exceptionally steep and sustained decline in the economy
Economic downturn that is more common, but less severe than a depression
Rapid increase/decrease int he average price of goods and services
Until the GD the US mostly used laissez-faire policies, but the New Deal would later transform the role of the US gov't in the economy
gov't decisions related to taxing and spending
gov't decisions related to the amount of money in circulation and thus the value of a dollar
Reaganomics or 'Supply-side economics"
Economic theory promoted by President Ronald Reagan in the 1980's, Gov't should cut taxes to spur investments and create supply, leading to more jobs and consumer demand.
taxes on goods imported from foreign countries
authorized the federal income tax
Capital Gains Tax
tax on income from capital investments, such as property and stocks
System where tax rates increase as income rises, such as Federal income taxes
System where tax rates decrease as income rises, such as Social Security taxes
System where tax rates are the same for all income levels, requires a high rate on everyone to generate enough revenue.
Mandatory (entitlement) Spending
Spending not controlled by annual budget decisions
Spending that congress/president can modify each year
Adjustments to the amount of money in circulation, and thus the value of the dollar.
Federal Reserve System a.k.a "the Fed"
Central banking system of the US since 1913
Federal Reserve Board
7-member board that makes national monetary policy, led by the Federal Reserve Chairman Janet Yellen.
Interest rate charged to member banks that borrow money from the Federal Reserve
Minimum liquid (cash) assets banks must keep on hand
Open Market Operations
Buying and selling of gov't securities (bonds) by the Fed
Gross Domestic Product
Estimate of the total monetary value of all the goods and services produced in an economy in 1 year
Consumer Price Index
Index of prices for common goods and services in US economy. Used to track inflation.
Percentage of people 'unemployed AND looking for work"
Amount of money spent beyond the revenue generated in a year through taxes and other sources
Amount of extra revenue left over after gov't has completed its spending in a year.
Total sum of outstanding debt obligations of the federal gov't
Glass-Steagall Act (1933)
Required separation of commercial and investment banks, though this was repealed in the 80's and 90's
Federal Deposit Insurance Corporation (FDIC)
A self-sustaining insurance system for bank deposits
Securities and Exchange Commission (SEC)
Created by the Securities Exchange Act (1934)
Environmental Protection Agency (EPA)
Created in 1970, tension between environment protection and economic efficiency
Term used to describe the increasing interaction and interdependence of the world economy