Chapter 17: Domestic Policies Flashcards
What is the difference between a recession and a depression?
Recessions are defined by a slowing economy over two quarters with declining GDP loss, and a depression lasts several years with more GDP loss.
What happens during economic inflation?
The dollar has less value, therefore prices increase.
What is considered a healthy balance of trade?
Exporting more goods and services than importing.
What are negative externalities?
The harmful effects of economic activities on third parties.
Contrast fiscal and monetary policy when faced with economic growth.
Fiscal policy wants the government to spend and implement tax policies, while monetary policy wants it to affect the supply of money and the level of interest rates.
What does the Federal Reserve Board do?
Decide the monetary policies of the U.S., primarily by way of setting the interest rates that banks use to borrow money.
Contrast mandatory and discretionary spending.
Mandatory is tied to a formula that automatically provides money to some program or purpose, while discretionary is not and can be changed.
What are income taxes?
Taxies levied on the annual incomes of individuals and corporations.
What are payroll taxes?
Taxes levied on salaries and wages.
What is the difference between regressive and progressive taxation?
Regressive is a system in which lower-income individuals are taxed at a higher rate than those who make more, progressive is the opposite.
What is the difference between a budget surplus and a budget deficit?
Surplus is when the government brings in more than it is spending, deficit is the opposite.
Define national debt.
The total outstanding debt of the federal government; the sum total of all annual budget deficits and surpluses.
What was the Great Recession?
An economic crisis from December 2007 to June 2009 when the bursting of a housing bubble led to a financial crisis and cuts in consumer spending.
What are the two types of federal safety net programs?
Social insurance and means-tested programs.
What does Social Security do?
Provides income support for the elderly, those with disabilities, and family survivors of working Americans.
What does the Earned Income Tax Credit (EITC) do?
Allows low-income individuals with at least one child to claim a credit against taxes owed for or, for some, to receive a direct cash transfer from the IRS.
What does the Supplemental Nutritional Assistance Program (SNAP) do?
Helps Americans who fall below a certain income to buy food for themselves and their families.
What is the difference between Medicare and Medicaid?
Medicare provides all senior citizens with affordable health insurance, and Medicaid provides health insurance to the poor.
What does the Children’s Health Insurance Program (CHIP) do?
Pays for health care services for children in households above the poverty line but below 133% to 400% of the poverty line, depending on the state.
What did the Affordable Care Act (ACA) aim to do?
Increase access to health insurance for all Americans and drive down the rising, burdensome cost of health care in the U.S.
What are regulations?
Government restrictions on people and businesses; are used to prevent practices deemed unacceptable.
What is deregulation?
The process of diminishing regulatory requirements for business.
What does the Temporary Assistance to Needy Families (TANF) do?
Provides income and services to poor families via state block grants. Has benefit time limits and a work requirement.
