Economic Policy Flashcards
What is the unemployment rate?
People who are seeking work but are unable to find it; 60,000 people; 2010-10% unemployment rate
What is the underemployment rate?
The unemployment rate plus those seeking work full time but can only find part time work
What is the CPI (Consumer Price Index)?
The prices of 80,000 items in the US are tracked monthly; the change in CPI is called inflation, which is up about 4%
The largest increase in inflation was in the 1970’s
What is capitalism?
An economic system where individuals and corporations own the means of production, distribution, and reap profits
What is a mixed economy?
A government, while not commanding the economy, are involved because of regulations such as taxes, unions, and the IRS
What is the United State’s economy?
It’s more like a mixed economy
What are multinational corporations?
Corporations with business inside the US and out
What is monetary policy?
The manipulation of the supply and demand of money and credit in private hands
What is the Federal Reserve (“The Fed”) do?
The Fed is a seven member board that includes the Chairman of the fed and controls monetary policy
How does the fed control monetary policy?
1) sets discount rates for money banks can borrow
2) sets reserve rates for how much a bank can have at any one time
3) buys and sells bonds
What is the Keynesian theory on how to solve budget problems?
Says that the government should spend their way out of a depression; this is predominantly backed by democrats
What is the Supply Side Economics theory on how to solve budget problems?
Says to stimulate the supply of goods, not the demand; in order to stimulate the economy, you should cut taxes; predominantly backed by Republicans
What are anti-trust laws?
Laws that break up monopolies
What is a monopoly?
Complete control over an industry
What is “right to work”?
You don’t have to join a labor union (only in montana)
What is the Taft Hartley Act?
Guarantees unions can do collective bargaining
What is the largest expenditure in the US?
Social welfare
What are entitlement programs?
Social insurance programs, you’ve paid into it so you get the benefits; ex/ social security, medicare, and unemployment benefits
What are means tested programs?
Programs that are only available to people under the poverty line; Deserving-those who can’t work bc of disability, etc; Undeserving-those who created their own problems and are looking for a handout
What is income?
The amount of money you make between any two points
What is wealth?
The amount that you already own, assets
What is relative deprivation?
Perception of how financially well off you are compared to others
How much is the top 1% (>389,000$) taxed?
39%
How many americans are hovering at or below the poverty line?
15%
