Chapter 17 Economic Policy Flashcards
Economic regulation
government regulation of business practices, industry rates, routes, or 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 regulation the private economy.
Deregulation
A reduction in market controls (such as price fixing, subsidies, 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 revenue.
Inflation
a rise in the general price levels of an economy
Gross Domestic Product
The total market value of all goods and services in an area during a year.
Monetary Policy
A form of governments regulations in which the nation’s money supply and interest rates are controlled.
Board of governors
The the federal reserve system, a seven member board that makes most economic decisions regarding interest rates and the supply of money.
Social Security act
A 1935 law that established old age insurance; assistance for the needy, aged, blind and families with the dependent children; and unemployment insurance
Entitlement programs
Government benefits that all citizens meeting eligibility criteria such as age, income level or unemployment are legally “entitled” to receive.
non-means tested programs
Programs that provide cash assistance to qualified beneficiaries, regardless of income. Among these are Social Security and unemployment insurance.
