Unit 4 Key Terms Part 1 Flashcards
the establishment, by the government, of rules aimed at influencing the behavior of firms and individuals; regulation can involve setting prices, establishing product and workplace standards, and limiting entry into an industry
Regulation
Agency in US Department of Commerce that issues patents and trademark registration to inventors
USTPO
the power of a government to take an individual’s property for public use if the owner is fairly compensated
Eminent Domain
a clause of the Fifth Amendment to the Constitution stating that the government must pay private owners when their property is taken for public use under the power of eminent domain
Takings Clause
case with ruling that held that the benefits of economic redevelopment do qualify as public use within the meaning of the Fifth Amendment
Kelo vs. City of New London
a unit of government created to set and enforce standards for a particular industry or area of economic activity
Regulatory Agency
an illegal, anticompetitive practice in which two or more firms agree to set a common price for a good or service
Price Fixing
an illegal, anticompetitive practice in which two or more firms agree in advance which one will submit the lowest bid for a contract offered through a competitive bidding process
Bid Rigging
an illegal, anticompetitive practice in which two or more firms agree to divide a market among themselves, selling only to certain customers or in certain geographic areas
Market Division
the combining of two or more separately owned firms into a single firm
Merger
“Let the buyer beware”; serves as a warning to buyers that they purchase goods and services at their own risk
Caveat Emptor
Novel by Upton Sinclair that described what went on in meat packing plants
The Jungle
Oversees the testing and approval of drugs before they go on the market
FDA
Book by Ralph Nader that claimed that automobiles were unsafe and that the auto industry resisted making cars safer because of the added cost
Unsafe at Any Speed
insures nearly all bank deposits for up to $100,000 per depositor
FDIC
Protects investors by making sure they have the information they need to judge whether to buy, sell, or hold a particular security; establishes and enforces rules to ensure that companies provide that information in a timely and accurate manner
SEC
sets safety and health standards for industries
OSHA
a situation in which a regulatory agency is dominated, or captured, by the industry it regulates; a captured agency tends to favor the industry it is meant to regulate more than the public interest
Regulatory Capture
the process of removing government restrictions on firms in order to promote competition or encourage economic activity
Deregulation
the supplying of a good or service by the government; examples include the services provided by publicly supported schools and universities
Public Provision
a coupon used to purchase a specific good or service
Voucher
a policy approach—often applied to environmental policy—that relies on market incentives, rather than regulation, to influence behavior
Market-Based-Policies
a tax on producers that is designed to reduce negative externalities, such as pollution
Corrective Tax
a policy that limits the amount of pollution a firm may legally emit each year but allows firms to trade with each other to obtain additional pollution permits
Cap and Trade
a government license, issued under a cap-and-trade system, that allows a producer to emit a certain amount of pollution
Pollution Permits
a resource that everyone has access to and can be easily overused or destroyed; examples include the atmosphere and the oceans
Common Resource
a circumstance in which a shared resource is overused or destroyed because users take no responsibility for its preservation
Tragedy of the Commons
a fee for the use of a common facility, such as a bridge or highway
Toll
the maximum amount of a resource that a person is allowed to use or consume in a given period of time
Quota
to convert a publicly owned resource or institution to private ownership
Privatize
an inefficient allocation of resources caused by government intervention in the economy
Government Failure
a practice in which law-makers agree to vote for each other’s legislation
Logrolling
created dozens of new programs and agencies aimed at reforming the banking system, helping businesses, and providing jobs
New Deal
a policy or action designed to promote business activity and stimulate economic growth
Economic Stimulus
any one of the five groups of a population that has been divided into fifths for the purpose of data analysis; for example, the top quintile of a country’s population in terms of income represents the top fifth of all earners
Quintiles
the percentage of the population that has a family income below a government-defined threshold, or poverty line
Poverty Rate
the estimated minimum income needed to support a family
Poverty Threshold
the ability of people to raise their standard of living and improve their economic status
Economic Mobility
a policy designed to reduce income inequality by taking money from the rich and distributing it to the poor
Income Redistribuation
a government benefit in the form of goods or vouchers, such as food stamps and public housing
In-Kind Transfers
a tax reduction given to low-wage workers when they file their federal income tax forms; its goal is to raise the incomes of poor people without discouraging them from working
Earned Income Tax Credit
a government program providing limited cash payments to workers who lose their jobs
Unemployment Insurance
a government benefit that is tied to family income so that benefits are reduced as income rises; examples include food stamps and welfare payments
Means-Tested Programs
