z: ch 17 final

Question 1

capitalism

Answer 1

an economic system in which individuals and corporations, not the government own the principle means of production and seek profits.

Question 2

mixed economy

Answer 2

an economic system in which the government is deeply involved in economic decisions through its role as regulator, consumer, taxer, employer and borrower.

Question 3

unemployement

Answer 3

measured by the bureau of labor statistics; the proportion of the labor force actively seeking work but unable to find jobs

Question 4

inflation

Answer 4

a rise in price of goods and services

Question 5

monetary policy

Answer 5

(controls the economy) government policy that attempts to manage the economy by controlling the money supply and thus interest rates.

Question 6

the federal reserve board

Answer 6

created by congress to regulate money supply. run by 7 member board with 14 year term. has more power over the U.S. economy than the president they regulate the supply of money in private hands

Question 7

fiscal policy

Answer 7

the policy that describes the impact of the federal budget (taxes, sending and borrowing) on the economy.

Question 8

Keynesian economics

Answer 8

use the power of government to stimulate the economy. –> higher taxes to fund social programs (i.e: social security, federal aid to the poor, etc.)
–> promoted by FDR and favored by democrats.

Question 9

supply side economics

Answer 9

stimulate the economy by reducing government taxation and regulation.

• -> reduce taxation and government regulation then people will work harder and keep more of the money they earn.
• ->more investment=greater supply of goods
• ->prompted by Reagan and republicans