Poli-Econ Test 2

Front 1

Appropriations Committees

Back 1

House/Senate committees in charge of setting the specific expenditures of money by the government of the United States. As such, they are among the most powerful of the committees, and and members are seen as influential

Front 2

Congressional Budget Office (CBO)

Back 2

The responsibilities of this office include projecting the budgetary effects of proposed legislation. The main goal is to provide Congress with objective, timely, nonpartisan analyses needed for economic and budget decisions and with the information and estimates required for the Congressional budget process. This includes projections on the effect on national debt

Front 3

Council of Economic Advisers (CEA)

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a group of economists who advise the President of the United States. It is a part of the Executive Office of the President of the United States, and provides much of the economic policy of the White House. The council prepares the annual Economic Report of the President.

Front 4

Countercyclical policies

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Government policy aimed at reducing or neutralizing anti-social effects of economic cycles. Such policies encourage spending during downturns, and tighten credit during inflationary periods

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Distributive Economic policy

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policies that extend goods and services to members of an organization, as well as distributing the costs of the goods/services amongst the members of the organization. Examples include government policies that impact spending for welfare, public education, highways, and public safety

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Re-distributive economic policy

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Policy intended to transfer wealth from one group to another in attempt to narrow wealth gap.

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Executive Office of the President (EOP)

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Group consisting of the immediate staff of the President of the United States, as well as multiple levels of support staff reporting to the President. Headed by the White House Chief of Staff

Front 8

Federal Reserve Board (FED)

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Seven-member board appointed by the president and confirmed by the U.S. Senate that supervises the banking system by issuing regulations controlling bank holding companies and federal laws over the banking industry. It also controls and oversees the US monetary system and credit supply. Members serve 14-year terms.

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Federal Reserve Chairman

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Head of the central banking system of the United States. One of seven members of the Board of Governors of the Federal Reserve System who are appointed by the President and confirmed by the Senate and have staggered terms of 14 years each. The chairman is appointed by the President, subject to Senate confirmation, to a four-year term

Front 10

Federal Open Market Committee (FOMC)

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A component of the Federal Reserve System, charged under U.S. law with overseeing open market operations (the buying and selling of government securities) in the United States.

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Fed Funds Rate

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The interest rate at which private depository institutions (mostly banks) lend balances (federal funds) at the Federal Reserve to other depository institutions. Changing the target rate is one form of open market operations that the Chairman of the Federal Reserve uses to regulate the supply of money in the U.S. economy

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Fed Discount Rate

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The interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility

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Fed Reserve Requirement

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Regulation that sets the minimum reserves each bank must hold to customer deposits and notes. These reserves are designed to satisfy withdrawal demands, and would normally be in the form of fiat currency stored in a bank vault (vault cash), or with a central bank. Sometimes used as a tool in monetary policy, influencing the country's economy, borrowing, and interest rates

Front 14

House Ways and Means Committee

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The chief tax-writing committee of the United States House of Representatives. has jurisdiction over all taxation, tariffs and other revenue-raising measures, as well as a number of other programs including: Social Security, Unemployment benefits, Medicare, Enforcement of child support laws, Temporary Assistance for Needy Families, Foster care and adoption programs

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Impoundments

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The refusal of presidents of the United States to spend money that has been appropriated by the United States Congress, banned in 1974. Proposed line item veto may take its place.

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Independent Agencies

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Those executive branch agencies of the federal government of the United States that exist outside of the federal executive departments. Structured like cabinet departments. Examples include: EPA and Small Business Administration

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Independent Regulatory Commissions (IRCs)

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Unique form of government bureacracy, holding policy-making responsibility. Meant to insulate Congress from conflicts of interest associated with regulating specific industries. Examples include: Federal Reserve Board, Securities/Exchange commission, Federal Trade Commission, Interstate Commerce Commission, CFTC, NLRB, NTSB

Front 18

Joint Economic Committee

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Committee comprised of 7 members from both House and Senate. Operates in investigatory and advisory roles for Congress. Power limited in helping to set the Congressional agenda, or helping find ways to produce legislation and policy. Annually reviews President's economic report.

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National Economic Council (NEC)

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Molded on the NSC, this group includes the President as Chair, the V.P. and 8 cabinet secretaries hold seats, and the EPA, CEA, OMB, and US trade Rep also included. Group functions to coordinate economic policymaking, coordinate economic advice to President, ensure decisions and programs consistent with President's stated goals, and to monitor implementation of President's economic policy agenda

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Office of Management and Budget (OMB)

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Group assisting the President in preparation of the annual budget

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Tight Money versus Loose Money

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Money policies by which a central monetary authority, for example, the Federal Reserve System, seeks to restrict credit and raise interest rates to limit inflation, versus making money plentiful and available at low interest rates to encourage investment and economic growth. The latter can lead to inflation

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Regulatory clearance

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OMB policy requiring each proposed economic regulation be sent by its sponsoring agency to the Office of Information and Regulatory Affairs of the OMB. Must pass cost-benefit analysis or be dropped from consideration.

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Political and Economic Criteria to Judge Taxes
(1) Acceptability
(2) Buoyancy
(3) Collectability
(4) Economically neutral
(5) Distributional consequences
(6) Economic effects
(7) Tax adequacy
(8) Visibility

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1.) Tax matched by type to political culture and sentiments. 2.) Tax that grows in proportion to inflation. 3.) Ease of collection of tax. 4.) Tax that does not direct business decisions in one direction or another. 5.) The impact of a tax on the distribution of society's wealth. 6.) Idea that taxes should not retard economic growth or force firms to leave taxing jurisdiction. 7.) Consideration that tax raises sufficient revenue to finance government. 8.) Condition that allows people to see tax burden for purpose of accountability.

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Capital gains

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Taxes on corporate or business profit, or profit from selling of corporate stock.

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Consumption taxes

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Tax that generates revenue from economic transaction; commonly a sales tax.

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Defecit

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Condition where government is spending more than collects in taxes and other revenue.

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Discretionary income

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Income that can be spent as one wishes

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Earned income

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Income derived from wages

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Excise taxes

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Taxes imposed on goods produced domestically

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Flat taxes

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Tax such that all pay the same percentage of their income in taxes

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Marginal Tax Rate

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The income tax rate at which the last dollar of your income is taxed. Under federal law, you often pay a lower tax rate on your first dollar of taxable income than you do on your last dollar. The marginal rate is the highest rate at which your income is taxed.