PSCI 1050 final review
a law, rule, statute, or edict that expresses the government's goals and provides for rewards and
punishments to promote those goals' attainment - ANS-public policy
goods or services that are provided by the government because they either are not supplied by
the market or are not supplied in sufficient quantities - ANS-public goods
the total value of goods and services produced within a country - ANS-gross domestic product
(GDP)
a consistent increase in the general level of prices - ANS-inflation
congressional grants given to states and localities on the condition that expenditures be limited
to a problem or group specified by the law - ANS-categorical grants
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 - ANS-Keynesians
an economic system in which the means of production and distribution are privately owned and
operated for profit with minimal or no government interference - ANS-laissez-faire capitalism
an economic theory that posits that reducing the marginal rate of taxation will create a
productive economy by promoting levels of work and investment that would otherwise be
discouraged by higher taxes - ANS-supply-side economics
efforts to regulate the economy through the manipulation of the supply of money and credit.
America's most powerful institution in this area of monetary policy is the Federal Reserve Board
- ANS-monetary policies
a system of 12 Federal Reserve banks that facilitates exchanges of cash, checks, and credit;
regulates member banks; and uses monetary policies to fight inflation and deflation -
ANS-Federal Reserve System
the interest rate on loans between banks that the Federal Reserve Board influences by affecting
the supply of money available - ANS-federal funds rate
methods by which the Open Market Committee of the Federal Reserve System buys and sells
government securities and other investment instruments to help finance government operations
and to reduce or increase the total amount of money circulating in the economy -
ANS-open-market operations
, the government's use of taxing, monetary, and spending powers to manipulate the economy -
ANS-fiscal policy
a tax on imported goods - ANS-tariff
taxation that hits upper income brackets more heavily - ANS-progressive taxation
taxation that hits lower income brackets more heavily - ANS-regressive taxation
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 - ANS-redistribution
incentive to individuals and businesses to reduce their tax liabilities by investing their money in
areas the government designates - ANS-loophole
amount by which government spending exceeds government revenue in a fiscal year -
ANS-budget deficit
federal spending that is made up of "uncontrollables," budget items that cannot be controlled
through the regular budget process - ANS-mandatory spending
budgetary items that are beyond the control of budgetary committees and can be controlled only
by substantive legislative action in Congress. Some uncontrollables, such as interest on the
debt, are beyond the power of Congress, because the terms of payments are set in contracts -
ANS-uncontrollables
federal spending on programs that are controlled through the regular budget process -
ANS-discretionary spending
a single firm in a market that controls all the goods and services of that market; absence of
competition - ANS-monopoly
government regulation of large businesses that have established monopolies - ANS-antitrust
policy
a policy of reducing or eliminating regulatory restraints on the conduct of individuals or private
institutions - ANS-deregulation
government grants of cash or other valuable commodities, such as land, to an individual or an
organization; used to promote activities desired by the government, reward political support, or
buy off political opposition - ANS-subsidies
the power of government to set conditions on companies seeking to sell goods or services to
government agencies - ANS-contracting power
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