Making Economic and Regulatory Policy

Question 1

Public Policy

Answer 1

A specific course of action taken by government to achieve a public goal

Question 2

Policy Agenda

Answer 2

The informal list of issues that Congress and the president consider most important for action

Question 3

Distributive Policy

Answer 3

A type of policy that provides benefits to all Americans

Question 4

Redistributive Policy

Answer 4

A type of policy that takes benefits (through taxes) from one group of Americans and gives them to another (usually through spending)

Question 5

Rule

Answer 5

The precise legal definition of how government will implement a policy

Question 6

Iron Triangle

Answer 6

A policy-making alliance that involves a very strong ties among a Congressional committee, an interest group, and a Federal Department or agency

Question 7

Issue Network

Answer 7

A policy-making alliance almond loosely connected participants that comes together on a particular issue, then disbands

Question 8

Fiscal Policy

Answer 8

Government policy that attempts to manage the economy by controlling taxing and spending

Question 9

Monetary Policy

Answer 9

Government policy that attempts to manage the economy by controlling the money supply and thus interest rates

Question 10

Inflation

Answer 10

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

Question 11

Unemployment

Answer 11

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

Question 12

Excise Tax

Answer 12

Consumer tax on a specific kind of merchandise, such as tobacco

Question 13

Deficit

Answer 13

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

Question 14

Tariff

Answer 14

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

Question 15

Progressive Tax

Answer 15

A tax graduated so that people with higher incomes pay larger fraction of their income than people with lower incomes

Question 16

Regressive Tax

Answer 16

A tax whereby people with lower incomes pay a higher fraction of their income than people with higher incomes

Question 17

National Debt

Answer 17

The total amount of money the Federal government has borrowed to finance deficit spending over the years

Question 18

Office of Management and Budget (OMB)

Answer 18

Presidential staff agency that serves as a clearinghouse for budgetary requests and management improvements for government agencies

Question 19

Congressional Budget Office (CBO)

Answer 19

An agency of Congress that analyzes presidential budget recommendations and estimates the cost of proposed legislation

Question 20

Sales Tax

Answer 20

General tax on sales transactions, sometimes exempting food and drugs

Question 21

Value-added Tax (VAT)

Answer 21

A tax on increased value of the product at each stage of production and distribution rather than just at the point of sale

Question 22

Tax Expenditure

Answer 22

Loss of tax revenue due to Federal laws that provide special tax incentives or benefits to individuals or businesses

Question 23

Monetarism

Answer 23

A theory that government should control the money supply to encourage economic growth and restrain inflation

Question 24

Federal Reserve System

Answer 24

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

Question 25

Laissez-faire Economics

Answer 25

Theory that opposes governmental interference in economic affairs beyond what is necessary to protect life and property

Question 26

Keynesian Economics

Answer 26

Economic theory based on the principles of John Maynard Keynes stating that government spending should increase during business slumps and be curbed during booms

Question 27

Trade Deficit

Answer 27

An imbalance in international trade in which the value of imports exceeds the value of exports

Question 28

World Trade Organization (WTO)

Answer 28

International organization derived from the General Agreement on Tariffs and Trade (GATT) that promotes it free trade around the world

Question 29

General Agreement on Tariffs and Trade (GATT)

Answer 29

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

Question 30

North American Free Trade Agreement (NAFTA)

Answer 30

Agreement signed by the US, Canada, Mexico in 1992 to form the largest free trade zone in the world

Question 31

Protectionism

Answer 31

Policy of erecting trade barriers to protect domestic industry

Question 32

Offshoring

Answer 32

The practice of exporting US jobs to lower paid employees in other nations

Question 33

Regulation

Answer 33

Effort by government to alter the free operation of the market to achieve social goals such as protecting workers and the environment

Question 34

Monopoly

Answer 34

Domination of an industry by a single company; also the company that dominates the industry

Question 35

Antitrust legislation

Answer 35

Federal laws that try to prevent a monopoly from dominating an industry and restraining trade

Question 36

Trust

Answer 36

A monopoly that controls goods and services, often in combinations that reduce competition

Question 37

Closed Shop

Answer 37

A company with a labor agreement under which union membership is a condition of employment

Question 38

Union Shop

Answer 38

A company in which new employees must join a union within a stated time period

Question 39

Labor Injunction

Answer 39

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

Question 40

Collective Bargaining

Answer 40

Method whereby representatives of the Union and employer determine wages, hours, and other conditions of employment through direct negotiation

Question 41

Environmental Impact Statement

Answer 41

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

Question 42

Deregulation

Answer 42

A policy promoting cutbacks in the amount of Federal regulation in specific areas of economic activity