Ch.16: Government and the Economy

Question 1

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

Answer 1

public policy

Question 2

The four fundamental economic goals of the government regarding public policy include

Answer 2

to promote economic stability
to stimulate economic growth
to promote business development
to protect employees and consumers

Question 3

Laws aimed to end criminal efforts to control business through such illegal means as extortion and kickbacks

Answer 3

federal racketeering laws

Question 4

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

Answer 4

public goods

Question 5

The two most important measures if tracking national economic growth include

Answer 5

Gross national product (GNP) & Gross domestic product (GDP)

Question 6

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

Answer 6

GNP

Question 7

the total value of goods and services produced within a country

Answer 7

GDP

Question 8

The most fundamental way that government affects investment is by

Answer 8

promoting business, investors, and consumer confidence

Question 9

FED. DEP: in charge of regulations of financial markets. Requires companies to disclose information about the stocks and bonds they are selling, inform buyers of the investment risk and protect investors from frauds

Answer 9

SEC: Securities and Exchange Commissions

Question 10

supports basic research across a range of fields in order advance fundamental knowledge that may be broadly useful

Answer 10

National Science Foundation

Question 11

conducts basis and applied research in biomedicine

Answer 11

National institute of health

Question 12

played a key role in ensuring an adequate supply of labor through American history, Special priority to workers who have skills that are in demand

Answer 12

Federal immigration

Question 13

put millions of people to work during the new deal. Bridges, parks, and buildings constructed

Answer 13

Work Progress Administration

Question 14

A consistent increase in the general level of price

Answer 14

inflation

Question 15

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

Answer 15

categorical grants

Question 16

was created to offer loans, loan guarantees, and disaster assistance to small businesses

Answer 16

Small Businesses Administration

Question 17

Nonprofit research and development consortium of major U.S computer microchip manufacturer

Answer 17

Sematech

Question 18

charged with overseeing union elections and collective bargaining between labor and industry

Answer 18

National Labor Relations Board

Question 19

The ____ ______ _______ act, which created the minimum wage.

Answer 19

Fair Labor Standards act

Question 20

raised concern over the unsanitary food processing. thus created the U.S Department of Agriculture to inspect packing plants and the meat they produced

Answer 20

The jungle, Sinclair

Question 21

_______ ___ ____ _____ helped sparked consumer safety.

Answer 21

Unsafe at Any Speed, (NADER)

Question 22

Departments that overlook consumer safety include

Answer 22

the consumer product safety commission
the department of transportation
the food and drug administration

Question 23

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

Answer 23

Keynesians

Question 24

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

Answer 24

laissez fair capitalism (ADAM SMITH)

Question 25

An economic theory that posits reducing the marginal rate of taxation will create a productive economy by promoting levels of work and investments that would otherwise be discouraged by higher taxes. TAXES SHOULD REMAIN LOW AT ALL TIMES TO ENSURE A GROWING ECONOMY.

Answer 25

supply side economy

Question 26

Consumer groups, environmentalist, businesses, and labor all work to shape the economic policy, Of these groups ____________ & _________ are the most consistent actors that weigh in across the spectrum of policies

Answer 26

organized labor and businesses

Question 27

Business groups are most united around the goal of

Answer 27

reducing government regulation

Question 28

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

Answer 28

monetary policy

Question 29

a system of 12 Federal Reserve banks that facilitates exchanges of cash, checks and credit; regulates member banks; and uses monetary policy to fight inflation and deflation

Answer 29

federal reserve system

Question 30

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

Answer 30

federal funds rate

Question 31

methods by which the federal reserve system buys and sells government securities and other investments instruments to help finance government operations and to reduce or increase the total amount of money circulating in the economy

Answer 31

open market operations

Question 32

insures bank deposits up to 250,000

Answer 32

Federal Deposit Insurance Corporation FDIC

Question 33

by guaranteeing mortgages, the government can reduce the risk that banks run in making such loans, thus allowing the banks to lower their interest rats and making such loans more affordable to middle and lower income families

Answer 33

Department of Housing and Urban Development

Question 34

the governments use of taxing monetary and spending powers to manipulate the economy

Answer 34

fiscal policy

Question 35

tax on imported goods

Answer 35

tariff

Question 36

taxes that are levied on specific products; such as tobacco and alcohol

Answer 36

excise taxes

Question 37

Taxation that hits upper income brackets more heavily

Answer 37

progressive taxes

Question 38

taxation that hits lower income brackets more heavily

Answer 38

regressive taxes (social security)

Question 39

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

Answer 39

redistribution

Question 40

incentives to individuals and businesses to reduce their tax liability by investing their money in areas the government designates

Answer 40

loophole

Question 41

established five tax brackets ranging from a 15% on the lowest income bracket to 39.6% on those in the highest income bracket

Answer 41

The tax reform act of 1986

Question 42

in the executive office of the president is responsible for preparing the president’s budget. includes the spending priorities and estimated cost of the president’s policy proposals

Answer 42

Office of Management and Budget

Question 43

Congress created its own budget institutions: __________ _______ _______; reliable information concerning the cost and economic impact of the policies it considers, it set up a budget process designed to establish spending priorities and to consider individual expenditures in the light of the entire budget. ANNUAL BUDGET RESOLUTION

Answer 43

Congressional Budget office

Question 44

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

Answer 44

budget deficit

Question 45

federal spending that is made up of uncontrollable budget items that cannot be controlled through the regular budget process (interest payments, social security, fed employees, unemployment, medicare)

Answer 45

mandatory spending

Question 46

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

Answer 46

uncontrollable

Question 47

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

Answer 47

discretionary spending

Question 48

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

Answer 48

monopoly

Question 49

government regulation of large businesses that have established monopolies

Answer 49

antitrust policy

Question 50

designed to control the monopolies practice of the railroads. first national regulatory policy

Answer 50

Interstate commerce Act

Question 51

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

Answer 51

deregulation

Question 52

government grants of cash or other valuable commodities such as land to a person or organization used to promote activities desired by the governments, reward political support to buy off political opposition

Answer 52

subsidies

Question 53

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

Answer 53

Contracting power

Question 54

Acts that establish new set of goals and procedures for protecting the environment

Answer 54

NEPA, Clean Air, Clean Water, Safe Drinking Water

Question 55

Three Basic Environmental Policy

Answer 55

mitigation (reduce greenhouse emissions)
R&D promote alternative technologies
Adapt to warmer climates