36 terms

Political Science Chapter 4

Political Economy
the branch of social science that deals with the production and distribution and consumption of goods and services and their management
Rational Choice Theory
A popular theory in political science to explain the actions of voters as well as politicians. It assumes that individuals act in their own best interest, carefully weighing the costs and benefits of possible alternatives.
the state of being unemployed or not having a job
a general and progressive increase in prices
Supply and Demand
an economic concept that states that the price of a good rises and falls depending on how many people want it (demand) and depending on how much of the good is available (supply)
the state of the economy declines
Economic Growth
steady growth in the productive capacity of the economy (and so a growth of national income)
Income Distribution
the way all the income earned in a country is divided among different groups of income earners
Progressive Taxes
A tax rate that increases as the amount of ones income increases
Flat Tax
proportional tax on individual income after a specified threshold has been reached
Tax Credit
a credit used in order to lower taxes
an ambiguity (especially one in the text of a law or contract) that makes it possible to evade a difficulty or obligation
Maynard Keynes
Promoted the New Deal; The government should provide programs to promote the economy
National Debt
the debt of the national government (as distinguished from the debts of individuals and businesses and political subdivisions)
Demand-Side Economics
the idea that government spending and tax cuts help an economy by raising demand
Trickle-Down Economics
economic theory that holds that money lent to banks and businesses will trickle down to consumers
Central Bank
a government monetary authority that issues currency and regulates the supply of credit and holds the reserves of other banks and sells new issues of securities for the government
Regulatory Policy
policy that results in government control over individuals and businesses. Examples include protection of the environment and consumer protection
Command Economy
An economic system in which the government controls a country's economy.
an economic system based on private ownership of capital
the condition when people work at jobs for which they are overqualified or that do not utilize their skills
Buying Power
the quantity of goods and services a person can buy with a given amount of money
Excess Demand
when quantity demanded is more than quantity supplied
a long-term economic state characterized by unemployment and low prices and low levels of trade and investment
Gross Domestic Product (GDP)
The total output of all economic activity in the nation, including goods and services.
Fiscal Policy
a government policy for dealing with the budget (especially with taxation and borrowing)
Regressive Taxes
taxes levied on all taxpayers, regardless of income or ability to pay, they tend to place proportionally more of a burden on those with lower incomes.
User Fee
charges levied for the use of a good or service - such as paying to visit a national park
Earned Income Tax Credit
a "negative income tax" that provides income to very poor individuals in lieu of charging them federal income taxes
Effective Tax Rate
The actual percentage of a person's income spent to pay taxes
Deficit Spending
government practice of spending more than it takes in from taxes
Government Bond
a bond that is an IOU on the United States Treasury
Supply-Side Economics
a school of economics that believes tax cuts can help an economy by raising supply
Monetary Policy
The management of the money supply and interest rates
Federal Reserve Bank (The Fed)
The central bank of the United States.
As related to international labor relations, a practice in which employees have a role in the management of a company that includes worker representatives with voting rights on the corporate board of directors.