Module 3

Question 1

amendment

Answer 1

a change made to a constitution, contract, or other formal document

Question 2

bank run

Answer 2

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

Question 3

bicameral legislature

Answer 3

a legislature comprised of two legislative houses, both of which must approve a bill before it becomes law

Question 4

bill

Answer 4

a proposed law under consideration by the government

Question 5

coalition government

Answer 5

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

Question 6

Collateralized Debt Obligation (CDO)

Answer 6

a complex type of investment in which individual loans are packaged together and sold to investors seeking to profit from the loan payments

Question 7

consumerism

Answer 7

an economic philosophy based on the continued and increasing consumption of goods by the population

Question 8

credit rating agency

Answer 8

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

Question 9

deficit

Answer 9

the negative value obtained when expenditures exceed income

Question 10

demand-side economics

Answer 10

an economic theory that advocates direct government intervention in the economy through fiscal measures such as government spending and taxation; also called Keynsian economics

Question 11

Electoral College system

Answer 11

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

Question 12

electorate

Answer 12

the citizens within a population who are eligible to vote

Question 13

Federal Reserve

Answer 13

the central bank in the United States

Question 14

federal system

Answer 14

a system of government under which power is divided between the national government and provincial, state, or territorial governments

Question 15

first-past-the-post

Answer 15

an electoral system in which the winning candidate is the one who receives the highest number of votes; also called the simple plurality system

Question 16

fiscal policy

Answer 16

government policies with respect to spending and taxation

Question 17

frozen-credit markets

Answer 17

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

Question 18

Great Depression

Answer 18

a deep and prolonged economic downturn that lasted through most of the 1930s

Question 19

income disparity

Answer 19

the difference in earnings between the wealthy and poorer members of society

Question 20

inflation

Answer 20

a decrease in the purchasing power of money, typically characterized by rising prices and demands for wage increases

Question 21

labour unions

Answer 21

worker organizations that use collective action in an effort to maintain or improve their members’ wages, benefits, and working conditions

Question 22

levels of government

Answer 22

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

Question 23

leverage

Answer 23

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

Question 24

majority government

Answer 24

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

Question 25

minority government

Answer 25

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

Question 26

modern liberalism

Answer 26

a form of liberalism that provides for greater government involvement in economics and social welfare matters than the involvement that existed under classical liberalism

Question 27

monetary policy

Answer 27

a policy designed to control the economy by increasing or limiting the supply of money available; usually controlled by a central bank

Question 28

monopoly

Answer 28

in business, a situation in which one company has exclusive control of the production and/or retail of a particular good or service

Question 29

neoliberalism

Answer 29

literally “new liberalism”; an economic philosophy that returns to many of the basic economic ideals laid out by classical liberal economists like Adam Smith

Question 30

New Deal

Answer 30

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.

Question 31

plebiscite

Answer 31

a direct, but usually non-binding, public vote held to give elected representatives input from the electorate on an important issue

Question 32

popular vote

Answer 32

the percentage of the total votes received by a candidate or a political party in an election

Question 33

progressivism

Answer 33

a liberal movement of the early twentieth century that sought political, economic, and social reform in the United States

Question 34

Reaganomics

Answer 34

the term given to the supply-side economic policies instituted under the administration of United States President Ronald Reagan in the 1980s

Question 35

recall

Answer 35

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

Question 36

referendum

Answer 36

a direct vote by the electorate on an issue of importance

The voting results are usually binding on the government.

Question 37

representation by population

Answer 37

a system under which individuals elected to government represent roughly similar numbers of citizens

Question 38

representative democracy

Answer 38

a system under which a democratically elected individual acts as the citizens’ representative in a governmental body

Question 39

residual powers

Answer 39

the constitutional right of a level of government to legislate matters not explicitly referred to in the constitution

Question 40

secret ballot

Answer 40

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

Question 41

simple plurality system

Answer 41

an electoral system in which the winning candidate is the one who receives the highest number of votes; also called first-past-the-post

Question 42

single-member constituency

Answer 42

a system under which a single individual represents the citizens of a riding or constituency

Question 43

social programs

Answer 43

government programs that provide financial aid and health, education, and similar services to certain groups in society

Question 44

stagflation

Answer 44

a situation in which an economy appears to be in recession, but is still subject to rising prices and wage demands

Question 45

suffrage

Answer 45

the right to vote

This is also known as the franchise.

Question 46

supply-side economics

Answer 46

an economic school of thought that advocates reducing taxes, especially for the wealthy, and reducing government regulation of the economy

Question 47

T-Bills

Answer 47

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

Question 48

trickle-down economics

Answer 48

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

Question 49

trust

Answer 49

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

Question 50

welfare capitalism

Answer 50

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

Question 51

welfare state

Answer 51

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.