Chapter 17 Textbook

Question 2

Capitalism-

Answer 2

An economic system in which individuals and corporations, not the government, own the principal means of production and seek profits.

Question 3

Mixed Economy-

Answer 3

An economic system in which the government is deeply involved in economic decisions through its role as regulator, consumer, subsidizer, taxer, employer, and borrower.

Question 4

Multinational Corporations-

Answer 4

Businesses with vast holdings in many countries, many of which have annual budgets exceeding that of many foreign governments.

Question 5

Securities and Exchange Commission (SEC)-

Answer 5

The federal agency created during the New Deal that regulates stock fraud.

Question 6

Minimum wage-

Answer 6

The legal minimum hourly wage for large employers.

Question 7

Labor union-

Answer 7

An Organization of workers intended to engage in collective bargaining.

Question 8

Collective bargaining-

Answer 8

Negotiations between representatives of labor unions and management to determine pay and acceptable working conditions.

Question 9

Unemployment rate-

Answer 9

As measured by the Bureau of Labor Statistics (BLS), the proportion of the labor force actively seeking work but unable to find jobs.

Question 10

Inflation-

Answer 10

the rise in prices for consumer goods.

Question 11

Consumer price index (CPI)-

Answer 11

The key measure of inflation that elates the rise in prices over time.

Question 12

Laissez-faire-

Answer 12

The principle that government should not meddle in the economy.

Question 13

Monetary policy-

Answer 13

Based on monetarism, monetary policy is the manipulation of the supply of money in private hands by which the government can control the economy.

Question 14

Monetarism-

Answer 14

Economic theory holding that the supply of money is the key to a nation?s economic health. Monetarists believe that too much cash and credit in circulation produces inflation.

Question 15

Federal Reserve System-

Answer 15

The main instrument for making monetary policy in the United States. It was created by Congress in 1913 to regulate the lending practices of banks and thus the money supply.

Question 16

Fiscal policy-

Answer 16

The policy that describes the impact of the federal budget- taxes, spending, and borrowing- on the economy. Fiscal policy is almost entirely determined by Congress and the president, who are the budget makers.

Question 17

Keynesian economic theory-

Answer 17

The theory emphasizing that government spending and deficits can help the economy weather its normal ups and downs. Proponents of this theory advocate using the power of government to stimulate the economy when its lagging.

Question 18

Supply-side economics-

Answer 18

An economic theory advocated by President Reagan holding that too much income goes to taxes so too little money is available for purchasing, and the solution is to cut taxes and return purchasing power to consumers.

Question 19

Protectionism-

Answer 19

Economic policy of shielding an economy from imports.

Question 20

World Trade Organization (WTO)-

Answer 20

International organization that regulates international trade.

Question 21

Antitrust policy-

Answer 21

A policy designed to ensure competition and prevent monopoly, which is the control of a market by one company.

Question 22

Food and Drug Administration (FDA)-

Answer 22

The federal agency formed in 1913 and assigned the task of approving all food products and drugs sold in the United States. All drugs, with the exception of tobacco, must have FDA authorization.

Question 23

National Labor Relations Act-

Answer 23

A 1935 law, also known as the Wagner Act, that guarantees workers the right of collective bargaining, sets down rules to protect unions and organizers, and created the national labor relations board to regulate labor-management relations.