Making Economic and Regulatory Policy Flashcards
Public Policy
A specific course of action taken by government to achieve a public goal
Policy Agenda
The informal list of issues that Congress and the president consider most important for action
Distributive Policy
A type of policy that provides benefits to all Americans
Redistributive Policy
A type of policy that takes benefits (through taxes) from one group of Americans and gives them to another (usually through spending)
Rule
The precise legal definition of how government will implement a policy
Iron Triangle
A policy-making alliance that involves a very strong ties among a Congressional committee, an interest group, and a Federal Department or agency
Issue Network
A policy-making alliance almond loosely connected participants that comes together on a particular issue, then disbands
Fiscal Policy
Government policy that attempts to manage the economy by controlling taxing and spending
Monetary Policy
Government policy that attempts to manage the economy by controlling the money supply and thus interest rates
Inflation
A rise in the general price level (and decrease in dollar value) owing to an increase in the volume of money and credit in relation to available goods
Unemployment
The number of Americans who are out of work but actively looking for a job. The number does not usually include those who are not looking
Excise Tax
Consumer tax on a specific kind of merchandise, such as tobacco
Deficit
The difference between the revenues raised annually from sources of income other than borrowing and the expenditures of government, including paying the interest on past borrowing
Tariff
Tax levied on imports to help protect the nation’s industries, labor, or farmers form foreign competition. It can also be used to raise additional revenue
Progressive Tax
A tax graduated so that people with higher incomes pay larger fraction of their income than people with lower incomes
Regressive Tax
A tax whereby people with lower incomes pay a higher fraction of their income than people with higher incomes
National Debt
The total amount of money the Federal government has borrowed to finance deficit spending over the years
Office of Management and Budget (OMB)
Presidential staff agency that serves as a clearinghouse for budgetary requests and management improvements for government agencies
Congressional Budget Office (CBO)
An agency of Congress that analyzes presidential budget recommendations and estimates the cost of proposed legislation
Sales Tax
General tax on sales transactions, sometimes exempting food and drugs
Value-added Tax (VAT)
A tax on increased value of the product at each stage of production and distribution rather than just at the point of sale
Tax Expenditure
Loss of tax revenue due to Federal laws that provide special tax incentives or benefits to individuals or businesses
Monetarism
A theory that government should control the money supply to encourage economic growth and restrain inflation
Federal Reserve System
The system created by Congress in 1913 to establish banking practices and regulate currency in circulation and the amount of credit available. It consists of 12 regional banks supervised by the Board of Governors
Laissez-faire Economics
Theory that opposes governmental interference in economic affairs beyond what is necessary to protect life and property
Keynesian Economics
Economic theory based on the principles of John Maynard Keynes stating that government spending should increase during business slumps and be curbed during booms
Trade Deficit
An imbalance in international trade in which the value of imports exceeds the value of exports
World Trade Organization (WTO)
International organization derived from the General Agreement on Tariffs and Trade (GATT) that promotes it free trade around the world
General Agreement on Tariffs and Trade (GATT)
An international trade organization with more than 130 members, including the US and the People’s Republic of China, that seeks to encourage free trade by lowering tariffs and other trade restrictions
North American Free Trade Agreement (NAFTA)
Agreement signed by the US, Canada, Mexico in 1992 to form the largest free trade zone in the world
Protectionism
Policy of erecting trade barriers to protect domestic industry
Offshoring
The practice of exporting US jobs to lower paid employees in other nations
Regulation
Effort by government to alter the free operation of the market to achieve social goals such as protecting workers and the environment
Monopoly
Domination of an industry by a single company; also the company that dominates the industry
Antitrust legislation
Federal laws that try to prevent a monopoly from dominating an industry and restraining trade
Trust
A monopoly that controls goods and services, often in combinations that reduce competition
Closed Shop
A company with a labor agreement under which union membership is a condition of employment
Union Shop
A company in which new employees must join a union within a stated time period
Labor Injunction
A court order forbidding specific individuals or groups from performing certain acts (such as striking) that the court considers harmful to the rights and property of an employer or community
Collective Bargaining
Method whereby representatives of the Union and employer determine wages, hours, and other conditions of employment through direct negotiation
Environmental Impact Statement
Statement required by Federal law from all agencies for any project using Federal funds to assess the potential affect of the new construction or development on the environment
Deregulation
A policy promoting cutbacks in the amount of Federal regulation in specific areas of economic activity
