Chapter 17 Flashcards
Economic regulation
Government regulation of business practices industry rates routes in areas serviced by particular industries
Laissez-faire
A French term meaning “To allow to do, to leave alone.” It holds that active governmental involvement in the economy is wrong
Business Cycles
Fluctuations between periods of economic growth and recession, or periods of boom and bust
Trusts
Large-scale, monopolistic businesses that dominate an industry
Interventionist State
Alternative to the laissez-faire state, the government took an active role in guiding and regulating the private economy
Deregulation
A reduction in market controls (such as price fixing, subsides, or controls on who can enter the field) in favor of market-based competition
Fiscal Policy
The deliberate use of the national government’s taxing and spending policies to maintain economic stability
Budget Deficit
The economic condition that occurs when expenditures exceed revenues
Inflation
A rise in the general price levels of an economy
Gross Domestic Product (GDP)
The total market value of all goods and services produced in an area during a year
Monetary Policy
A form of government regulation in which the nation’s money supply and interest rates are controlled
Board of Governors
In the Federal Reserve System, a seven-member board that makes most economic decisions regarding interest rates and the supply of money
Open Market Opportunities
The buying and selling of government securities by the Federal Reserve Bank
Discount Rate
The rate of interest at which the Federal Reserve Board lends money to member banks
Reserve Requirements
Government requirements that a portion of member banks’ deposits be retained as backing for their loans
