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Chapter 18 (Economic Policy) Vocabulary AP Government

Terms in this set (16)

Gross domestic product
The total of all goods and services produced in the economy during a given year (487).
Monetarism
The belief that inflation occurs when too much money is chasing too few goods (491).
Keynesianism
The belief the government must manage the economy by spending more money when in a recession and cutting spending when there is inflation (491).
Economic planning
The belief that government plans, such as wage and price controls or the direction of investment, can improve the economy (491).
Supply-side theory
The belief that lower taxes and fewer regulations will stimulate the economy (492).
Reaganomics
The belief that a combination of monetarism, lower federal spending, and supply-side economics will stimulate the economy (492).
Monetary policy
Managing the economy by altering the supply of money and interest rates (494).
Fiscal policy
Managing the economy by the use of tax and spending laws (495).
Budget
A document that states tax collection, spending levels, and the allocation of spending among purposes (497).
Fiscal year
For the federal government, October 1 through the following September 30 (497).
Budget resolution
A congressional decision that states the maximum amount of money the government should spend (497).
Entitlements
A claim for government funds that cannot be changed without violating the rights of the claimant (497).
Sequester
Automatic spending cuts (499).
Budget Surplus
collecting more than spending
Federal Reserve System
a U.S. federal banking system that is under the control of a central board of governors
National Debt
The total deficit from the first presidency down to the present
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