American Gov't Chapter 16 And 18-Final Exam

Front 1

a law, rule, statute, or edict that expresses the government’s goals and provides for rewards and punishments to promote their attainment

Back 1

Public policy

Front 2

let the buyer beware

Back 2

Caveat Emptor

Front 3

goods and services that are provided by the government because they either are not supplied by the market or are not supplied in sufficient quantities

Back 3

Public goods

Front 4

an economic system in which the means of production and distribution are privately owned and operated for profit with minimal or no government interference

Back 4

Laissez-Faire Capitalism

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followers of the economic theories of John Maynard Keynes, who argued that the government can stimulate the economy by increasing public spending or by cutting taxes

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Keynesians

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followers of economic theories that contend that the role of the government in the economy should be limited to regulating the supply of money

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Monetarists

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the market value of the goods and services produced in the economy

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Gross National Product (GNP)

Front 8

the total value of goods and services produced within a country

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Gross Domestic Product (GDP)

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a consistent increase in the general level of prices

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Inflation

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congressional grants given to states and localities on the condition that expenditures be limited to a problem or group specified by the law

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Categorical Grants

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agreement to offer a trading partner the lowest tariff rate offered to other trading partners

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Most favored nation status

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international trade agency promoting free trade that grew out of the General Agreement on Tariffs and Trade

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World Trade Organization (WTO)

Front 13

international trade organization, in existence from 1947-1995, that set many of the rules governing international trade

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General Agreement on Tariffs and Trade (GATT)

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trade treaty among the United States, Canada, and Mexico to lower and eliminate tariffs among the three countries

Back 14

North American Free Trade Agreement (NAFTA)

Front 15

effort to regulate the economy through the manipulation of the supply of money and credit

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Monetary Policies

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a system of twelve Federal Reserve Banks that facilitates exchanges of cash, checks, and credit, regulates member banks, and uses monetary policies to fight inflation and deflation

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Federal Reserve System

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the amount of liquid assets and ready cash that banks are required to hold to meet depositors’ demands for their money

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Reserve requirement

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method by which the Open Market Committee of the Federal Reserve System buys and sells government securities, etc., to help finance government operations and to reduce or increase the total amount of money circulating in the economy.

Back 18

Open Market Operations

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the interest rate on loans between banks that the federal reserve board influences by affecting the supply of money available

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Federal funds rate

Front 20

the government’s use of taxing, monetary, and spending powers to manipulate the economy

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fiscal policies

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a tax on imported goods

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tariff

Front 22

taxation that hits upper income brackets more heavily

Back 22

progressive taxation

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taxation that hits lower income brackets more heavily

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regressive taxation

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a policy whose objective is to tax or spend in such a way as to reduce the disparities of wealth between the lowest and the highest income brackets

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redistribution

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incentive to individuals and businesses to reduce their tax liabilities by investing their money in areas that the government designates

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loophole

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amount by which government spending exceeds government revenue in a fiscal year

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budget deficit

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federal spending that is made up of “uncontrollables,” budget items that cannot be controlled through the regular budget process.

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mandatory spending

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budgetary items that are beyond the control of budgetary committees and can be controlled only by substantive legislatives action in Congress

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uncotrollables

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federal spending on programs that are controlled through the regular budget process

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discretionary spending

Front 30

the existence of a single firm in a market that controls all the goods and services of that market; absence of competition

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Monopoly

Front 31

government regulation of large businesses that have established monopolies

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Antitrust Policy

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a policy of reducing or eliminating regulatory restraints on the conduct of individuals or private institutions

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Deregulation

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government grants of cash or other valuable commodities, such as land, to individuals or organizations; used to promote activities desired by the government, to reward political support, or to buy off political opposition

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subsidies

Front 34

the power of government to set conditions on companies seeking to sell goods or services to government agencies.

Back 34

contracting power