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51 terms

Economic Policymaking

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Capitalism
an economic system in which individuals and corporations, not the government own the principle means of production and seek profits
Mixed Economy
An economic system in which the government is deeply involved in economic decisions (as through its roles as regulator, consumer, subsidizer, taxer, employer, and borrower)
Multinational Corporations
Businesses with vast holdings in many countries
Securities and Exchange Commission (SEC)
the federal agency created during the New Deal that regulates the stock market
Minimum Wage
The legal minimum hourly wage to which most workers are entitled
Labor Union
An organization of workers intended to engage in collective bargaining
Collective Bargaining
negotiations between representatives of labor unions and management to determine pay and acceptable working conditions
Unemployment Rate
As measured by the Bureau of Labor Statistics, the proportion of the labor force actively seeking work but unable to find jobs
Underemployment Rate
As measured by the Bureau of Labor Statistics, a statistic that includes, along with the unemployed discouraged workers and people who are working part-time because they cannot find full-time work
SEC
Securities and Exchange Commission
Bureau of Labor Statistics
This organization measures the unemployment and underemployment rates
Inflation
A rise in price of goods and services
Consumer Price Index
The key measure of inflation-- the change in the cost of buying a fixed basket of goods and services
Laissez-faire
The principle that government should not meddle in the economy
Monetary Policy
Government manipulation of the supply of money in private hands-- one of two important tools by which the government can attempt to steer the economy
Monetarism
An economic theory holding that the supply of money is the key to a nation's economic health, with too much cash and credit in circulation producing inflation
Federal Reserve System
The main instrument for making monetary policy in the United States. It was created by Congress in 1913 to regulate the lending practices of banks and thus the money supply
Fiscal Policy
Use of the federal budget-- taxes, spending, and borrowing-- to influence the economy; along with monetary policy; a main tool by which the government can attempt to steer the economy. It is almost entirely determined by Congress and the president
The two tools used to steer the economy
Fiscal and Monetary Policy
Keynesian Economic Theory
Named after the English economist, the theory emphasizing that the government spending and deficits can help the economy deal with its ups and downs. proponents of this theory advocate using the power of government to stimulate the economy when it is lagging (increase demand of jobs)
Supply-Side Economics
An economic theory, first applied during the Reagan administration, holding that the key task for fiscal policy is to stimulate the supply of goods as by cutting tax rates (tax cuts)
The Two Sides to the Fiscal Policy
Supply-Side Economics and Keynesian Economic Theory
Protectionism
Economic policy of shielding an economy from imports
World Trade Organization
International organization that promotes free trade
Antitrust Policy
Policy designed to ensure competition and prevent monopoly (permits the Justice Department to sue in federal court to break up companies that control too much of the market)
FDA
Food and Drug Administration
Food and Drug Administration
The federal agency formed in 1913, with broad regulatory powers over the manufacturing, contents, marketing, and labeling of foods and drugs sold in the US
National Labor Regulations Act
Guarantees workings the right of collective bargaining, sets down rules to protect unions and organizers
Wagner Act (Synonym)
National Labor Regulations act
National Labor Relations Board
Created by the National Labor Regulations Act, it's job is to regulate labor-management relations
Social Welfare Policies
Policies that provide benefits, cash, or in-kind, to individuals, based on either entitlement or means testing
Two Types of Social Welfare Policies
Entitlement Programs and Means-Tested Programs
Entitlement Programs
Government programs providing benefits to qualified individuals regardless of need (e.g. Social Security and Medicare)
Means Tested Programs
Government programs providing benefits only to individuals who qualify based on specific needs (e.g. Medicaid and Food Stamps)
Income Distribution
The way the national income is divided into "shares" ranging from the poor to the rich
Relative Deprivation
A perception by an individual that he or she is not doing well economically in comparison to others
Income
The amount of money collected between any two points in time
Wealth
the value of assets owned
Poverty Line
The income threshold below which people are considered poor, based on what a family must spend for an "austere" standard of living, traditionally set at three times the cost of a subsistence diet
Feminization of Poverty
The increasing concentration of poverty among women, especially unmarried women and their children
Progressive Tax
a tax by which the government takes a greater share of the income of the rich than of the poor-- for example, when a rich family pays 50 percent of its income in taxes, and a poor family pays 5 percent
Proportional Tax
A tax by which the government takes the same share of income from everyone, rich and poor alike
Regressive Tax
A tax in which the burden falls relatively more heavily on low income groups than on wealthy taxpayers. The opposite of a progressive tax, in which tax rates increase as income increases
EITC
Earned Income Tax Credit
Earned Income Tax Credit
A refundable federal income tax credit for low-to-moderate-income working individuals and families, even if they did not earn enough money to be required to file a tax return
Transfer Payments
Benefits given by the government directly to individuals-- either cash transfers, such as Social Security Payments, or in-kind transfers, such as food stamps and low-interest college loans
Social Security Act of 1935
Created both the Social Security program and a national assistance program for poor families, usually called Aid to Families with Dependent Children
Personal Responsibility and Work Opportunity Reconciliation Act
The welfare reform law of 1996, which implemented the Temporary Assistance for Needy Families programs
Temporary Assistance for Needy Families
Replacing Aid to Families with Dependent Children as the program for public assistance to needy families, and requires people on welfare to find work within two years and sets a lifetime maximum of five years
TANF
Temporary Assistance for Needy Families
Social Security Trust Fund
The "account" into which Social Security employee and employer contributions are "deposited" and used