Module 3 Flashcards
amendment
a change made to a constitution, contract, or other formal document
bank run
a situation in which large depositors at a bank attempt to withdraw their savings at the same time, usually resulting in the bankruptcy of the financial institution
bicameral legislature
a legislature comprised of two legislative houses, both of which must approve a bill before it becomes law
bill
a proposed law under consideration by the government
coalition government
in a parliamentary system, this term describes a situation where two or more rival parties agree to work together by combining the seats they have won in an election to have a sufficient number of seats to form the government
Collateralized Debt Obligation (CDO)
a complex type of investment in which individual loans are packaged together and sold to investors seeking to profit from the loan payments
consumerism
an economic philosophy based on the continued and increasing consumption of goods by the population
credit rating agency
a business that assesses an individual or organization’s financial status and history and assigns a rating that indicates the perceived likelihood of a loan being paid back
deficit
the negative value obtained when expenditures exceed income
demand-side economics
an economic theory that advocates direct government intervention in the economy through fiscal measures such as government spending and taxation; also called Keynsian economics
Electoral College system
the method used to select the president of the United States in which voters cast ballots for official electors who then vote to select the president
electorate
the citizens within a population who are eligible to vote
Federal Reserve
the central bank in the United States
federal system
a system of government under which power is divided between the national government and provincial, state, or territorial governments
first-past-the-post
an electoral system in which the winning candidate is the one who receives the highest number of votes; also called the simple plurality system
fiscal policy
government policies with respect to spending and taxation
frozen-credit markets
refers to a situation in which financial institutions are reluctant to lend money to consumers, businesses, or to one another because economic conditions increase the likelihood that borrowers will fail to pay back loans
Great Depression
a deep and prolonged economic downturn that lasted through most of the 1930s
income disparity
the difference in earnings between the wealthy and poorer members of society
inflation
a decrease in the purchasing power of money, typically characterized by rising prices and demands for wage increases
labour unions
worker organizations that use collective action in an effort to maintain or improve their members’ wages, benefits, and working conditions
levels of government
a system in which power and responsibility is divided between national, provincial, and local (municipal) governments, usually on the basis of which level of government is best suited to provide a particular service to its citizens
leverage
in economic terms, borrowing money from others for the purposes of investment with the intent of generating profits beyond those which the borrower could achieve using his or her own financial resources
majority government
in a parliamentary system, this term describes a situation where the governing party has more than 50 percent of the available seats in the legislature
minority government
in a parliamentary system, this term describes a situation where the governing party has more seats than any other party in the legislature, but has less than 50 percent of the total seats
modern liberalism
a form of liberalism that provides for greater government involvement in economics and social welfare matters than the involvement that existed under classical liberalism
monetary policy
a policy designed to control the economy by increasing or limiting the supply of money available; usually controlled by a central bank
monopoly
in business, a situation in which one company has exclusive control of the production and/or retail of a particular good or service
neoliberalism
literally “new liberalism”; an economic philosophy that returns to many of the basic economic ideals laid out by classical liberal economists like Adam Smith
New Deal
an economic program instituted by Franklin Roosevelt’s administration during the 1930s
This program was characterized by the increased government regulation of private industry, massive government spending on public works projects, and government programs to aid the economically disadvantaged.
plebiscite
a direct, but usually non-binding, public vote held to give elected representatives input from the electorate on an important issue
popular vote
the percentage of the total votes received by a candidate or a political party in an election
progressivism
a liberal movement of the early twentieth century that sought political, economic, and social reform in the United States
Reaganomics
the term given to the supply-side economic policies instituted under the administration of United States President Ronald Reagan in the 1980s
recall
a political process in which the electorate, by way of a new election outside the time frame of a regular general election, may reverse a previous decision to elect an individual to public office
referendum
a direct vote by the electorate on an issue of importance
The voting results are usually binding on the government.
representation by population
a system under which individuals elected to government represent roughly similar numbers of citizens
representative democracy
a system under which a democratically elected individual acts as the citizens’ representative in a governmental body
residual powers
the constitutional right of a level of government to legislate matters not explicitly referred to in the constitution
secret ballot
the provision that voters should be able to cast their ballots in private, and that no other individual should know how a person votes unless the voter chooses to share that information
simple plurality system
an electoral system in which the winning candidate is the one who receives the highest number of votes; also called first-past-the-post
single-member constituency
a system under which a single individual represents the citizens of a riding or constituency
social programs
government programs that provide financial aid and health, education, and similar services to certain groups in society
stagflation
a situation in which an economy appears to be in recession, but is still subject to rising prices and wage demands
suffrage
the right to vote
This is also known as the franchise.
supply-side economics
an economic school of thought that advocates reducing taxes, especially for the wealthy, and reducing government regulation of the economy
T-Bills
a type of investment in which investors are actually lending money to the government which the government pays back with some interest and, usually, within a year
trickle-down economics
the concept that, under a supply-side approach to economics, tax breaks for the wealthy would encourage investment and create jobs, thereby allowing wealth to “trickle down” to the middle and lower classes
trust
in business, an arrangement in which companies in the same industry agree not to compete with one another, thereby artificially controlling the price of the goods or services the companies provide
welfare capitalism
a situation in which industrialists initiate programs and policies to benefit their workers; a system that combines liberal economic ideals with government legislation, policies, and programs that protect workers’ rights and provide basic services like health care and unemployment insurance
welfare state
a term used to describe a situation where government provides for many of the material, social, and economic needs of the population
Services may include financial support for the unemployed; health and dental care; child care; grade school and post-secondary education; and funding for public transportation, parks, and the arts.
