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115 Cards in this Set
- Front
- Back
Economics
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Social Science involving production, distribution and consumption of goods and services
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Macroeconomics
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Overall aspect of national economy, income, output, and interrelationship
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Microeconomics
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National economy, individual firms, households, and consumers
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Central problem of economic society
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Scarcity
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Puritan Work Ethic
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Work, Thrift, Savings
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Command Economy
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Systems using totalitarian political methods as well as state-directed economies
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Market Economy
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A system in which individuals own land, housing, otherwise known as the means of production
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Major assumptions of capitalist philosophy
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Needs were primarily individual, not communal.
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Consumer soverignty
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The ability of buyers to cast their vote in dollars
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Division of labor
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Workers producing only small parts of finished good
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The "market"
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Structured environment in which buyers and sellers bid freely amongst themselves to determine wages, rent, and profits
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Who determines resource allocation?
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Buyers and sellers
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Who determines what is produced?
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Buyers and sellers
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Who determines prices?
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Buyers and sellers
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What are the factors of production
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Land, Labor, and Capital
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What is laissez-faire?
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Hands off government in the market
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What role does competition play in a capitalist economy?
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Provides for the most efficient use of resources
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Monopoly
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Control by one group of the means of producing or selling a good or service
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Oligopoly
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Control by a few groups of the means of producing or selling a good or service
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Conglomerate
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A merger between distinctly different corporations
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What impact did the Industrial Revolution have on capitalism?
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Mechanization, assembly line, efficiency
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Gilded Age
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Civil war to WWII
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Why is it said that early American labor unions lived in a hostile environment?
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Industry was against labor unions
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rugged individualism
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What halted the growth of labor unions
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Knights of Labor
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First successful labor union
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Great Sitdown Strike in Flint
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Dec. 30 1936-Feb 11, 1937, 112,000/150,000 workers came to work and sat down everyday at Fisher Body No. 2
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CIO compared to AFL
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Considered more radical
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National Labor Relations Board
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Prevent interference with the right of labor
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Fair Labor Standards Act
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Established minimum wage and maiximum hours
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First minimum wage
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25 cents an hour
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Wagner Act
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Gave workers the right to self-organize
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Walsh-Healy Act
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Congress established 40 hour work week
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Taft-Hartley Act
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Prevented unfair practices by labor unions
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Labor's basic goals today
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Higher wages, shorter hours, and better working conditions, fringe benefits, job securtity
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Percent of workers in unions
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11%
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Why do unions have less power now
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less members
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How did government regulate economy before New Deal?
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Maintaining conditions in which free enterprise can operate
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Why were Americans so optomistic during summer of '29?
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Industrial production had risen 50% over the past decade, profits were high, increased wages
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Causes of Great Depression
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World food prices declined, slump in the construction industry, misdistribution of income
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How did Hoover and Roosevelt differ in the 1932 campaign on economic policy?
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Roosevelt attacked Hoover’s Deficit Spending and promised to balance the budget
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Legacy of Great Depression
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Made a lasting imprint on the lives of millions of Americans. Challenged the traditional view that those who failed in the economic race only had themselves to blame
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How did FRR deal with the banking crisis?
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Emergency Banking Relief Act Agriculture? Agricultural Adjustment Act.
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How did FDR deal with agriculture?
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Agricultural Adjustment Act
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How did FDR deal with unemployment?
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PWA, WPA, CCC
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National unemployment rate during Great Depression?
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25%
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• What were some of the main problems facing President Truman during the immediate post World War II period?
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Inflation
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• What wartime controls gave the U.S. economy some of the characteristics of a “command economy” during the war?
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Meat and Gasoline rationing
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What is inflation?
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Increase in price on a good or service
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Demand-pull inflation
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Increased inflation due to increasae in consumer demand
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Cost-push inflation
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Increased production costs, as from higher wages, drives up prices
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• Why did the Republicans win control of both houses of Congress in 1946 and why was New York Gov. Thomas E. Dewey, their presidential nominee, heavily favored in 1948?
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Strikes, Truman won labor support after vetoing Taft-Hartley
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Provisions of Taft-Hartley
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REstore balance to labor-management relations
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Closed Shop
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Only union members could be hired
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Union Shop
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Need not be a member to join, but had to within a timeframe
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Open Shop
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Union member is voluntary
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Section 14-B of Taft-Hartley
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Outlawed closed shops and union shops
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Youngstown Sheet and Tube vs Sawyer
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President exceeded his authority and ordered mills to private ownership
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Philosophy behind Employment Act of 1946
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Have full employment
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Full employment
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4% or less
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Structural unemployment
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Long-running, serious problem, results when demand for a particular projuct is low in relation to its supply
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Cyclical unemployment
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Cause by fluctuations in the business cycle, decline from a demand in goods and services, when above 4%
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Frictional unemployment
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Short run, normal, workers voluntarily leave one job in search for another
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•When does the U.S. government consider a person to be unemployed
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Someone who is actively seeking a job but is unable to find it
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•What segments of the U.S. labor force are most likely to be unemployed?
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Teens and blacks
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•What are some of the government programs devised to get people off the unemployment list?
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Humphrey-Hawkins Full Employment and Balanced Growth Act
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•What was President Eisenhower’s basic economic philosophy?
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Security with solvency
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•What was his attitude toward business leaders?
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Admired them
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•Why did Eisenhower engage in so many veto battles with congressional Democrats?
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The all republican congress was turned over to the democrats in 1958
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•What did Eisenhower think of Keynesian economics, specifically deficit finance
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He wanted to lead America away from deficit spending
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• How did the Eisenhower Administration respond to the three mild recessions that occurred between 1953-1960?
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Tax cuts
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•What role did the slump of 1960 play in the outcome of that year’s presidential election?
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Helped JFK win over Nixon
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Landrum-Griffin Act
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Contains “internal democracy”, requires detailed financial reports by unions
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JFK's top economic priority
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Recession
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What was the “New Economics?
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Assumes the US economy has an ever rising potential, Heller, Actual and Potential GDP
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How did JFK and LBJ fight inflation
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Tax cut
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Jawboning
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Trying to persuade others using the high office
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Wage-price guidelines
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Tied wage prices to producitivity for balance
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Why was a tax cut for business at the top of Kennedy’s agenda?
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Investment for the future
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Gross National Product
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The total market value of all the goods and services produced by a nation during a specified period
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What is the meaning of the concept of “Potential Gross National Product?”
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What we could produce in a full employment economy
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What is Gross Domestic Product?
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The total market value of all the goods and services produced within US borders during a specified period
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How does the U.S. government define poverty?
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Family of four below $19,350, individually- 9570.
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How did the Vietnam War influence Johnson’s domestic priorities?
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U.S. can't have both guns and butter
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Why did LBJ agree to a 10% tax income tax surcharge in 1968?
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Pushed hard on the idea of the “Great Society” needed lots of money to have both guns and butter.
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What were some of the key provisions of the Economic Opportunity Act?
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Created coordinated spending of other federal agencies that were directed towards a specific group of poor people
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What was the Job Corps?
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Youths from bad home situations were offered remedial education, as well as vocational training
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What was “Operation Headstart?”
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Pre-school children received early education before becoming disabled by a bad home life.
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The Neighborhood Youth Corps
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to help unemployed teen dropouts by giving them jobs after school and during vacations. Keep teens off the streets
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• What are some examples of the ‘entitlement” programs enacted as part of Johnson’s Great Society?
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Medicare and Medicaid
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Entitlement
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When someone qualifies for something by meeting specific standards
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Staglfation
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Combination of a stagnant economy and inflation.
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Nixon's biggest economic problem
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Inflation
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How did Nixon fight inflation
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Monetary Fiscally--tax cuts
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Rate of inflation when Nixon took office
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6%
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Why did Nixon resort to Federal controls over economy
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Stocks slumped, GNP declined
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Why don't wage and price controls work?
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Halts competition
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Nixonomics
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All things that should go up (stock market, corporate profits, real spend able income) go down and unemployment, prices, and interest rates go up
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Rate of inflation when Ford took office
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20%
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WIN program
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Whip Inflation Now...it sucked
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Consumer Price Index
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The basic measure of price increases in goods and services
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Hyperinflation
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Extrememly high and rapid inflation
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Greenspan Commission
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Commission headed by Alan Greenspan to overview the Social Security problem
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Greenspan's recommendations
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Raise the age to receive SS to 67, federal and non-profit employees made SS universal
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• What are some of the problems that it could face in the future when the labor force will shrink in relation to the number of retired workers?
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There will be more people receiving SS than putting money into the system
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Present Social Security tax rate
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6.2%
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OASI
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Old age and survivor insurance
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Medicare
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SS program the reimburses hospitals and physicians for medical care to persons above 65
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Medicaid
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Helps people who can not finance their own medical expenses
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Reagan's college major
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Economics
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supply-side economics
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A return to the ideas of laissez-faire, hoped to reduce both unemployment and inflation, govt cools off economy by reducing demand for goods and services
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Reasons behind Recovery Act of 1981
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? Productivity was reduced by high taxes, Marginal Tax Rates must be reduced, people needed incentives to work
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Gramm-Rudman-Hollings Act of 1985
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Wanted to shrink the deficit for the budget to be balanced by 1991
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Air traffic controllers dispute
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Federally employed workers were not allowed to strike, so when air traffic controllers did, Regan fired them
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Progressive tax
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Takes higher percentage of tax from high-income than lower income
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regressive tax
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Takes higher percentage of tax from low-income than high-income.
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