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Regulatory Policy Flashcards

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1
Q

What is laissez-faire economics?

A

An economic theory advocating minimal government intervention in business and markets.

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2
Q

What is a mixed economy?

A

An economic system combining private enterprise with government regulation and support.

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3
Q

What are the two main goals of economic regulation?

A

Economic efficiency (e.g., preventing monopolies) and economic equity (e.g., protecting workers or consumers).

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4
Q

Why is the U.S. a major promoter of business and agriculture?

A

To maintain prosperity, stabilize markets, and support key economic sectors through subsidies, tax credits, and regulation.

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5
Q

What is fiscal policy?

A

Government decisions about taxing and spending to influence the economy.

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6
Q

What’s the difference between hard power and soft power?

A

Hard power uses force (military), while soft power uses persuasion (diplomacy, culture, aid).

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7
Q

What agency leads U.S. diplomacy?

A

The Department of State

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8
Q

What organization manages U.S. foreign intelligence?

A

The Central Intelligence Agency (CIA)

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9
Q

What was the U.S. foreign policy strategy during the Cold War?

A

Containment – preventing the spread of communism.

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10
Q

What international agreement to reduce carbon emissions did the U.S. withdraw from in 2017?

A

The Paris Agreement.

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11
Q

What is a market failure in environmental policy?

A

When private markets do not allocate resources efficiently or equitably, justifying government intervention (e.g., pollution).

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12
Q

What is a market failure in environmental policy?

A

When private markets don’t allocate resources efficiently or equitably, justifying government intervention.

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13
Q

What is isolationism?

A

A historical U.S. tendency to avoid entanglement in global affairs, dominant before WWII.

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14
Q

What is containment? `

A

The Cold War strategy of preventing the spread of communism through alliances, aid, and military presence.

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15
Q

What is the Federal Reserve (the Fed)?

A

The central bank of the U.S., which manages monetary policy to control inflation and stabilize the economy.

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16
Q

Why is U.S. leadership important in addressing climate change?

A

The U.S. is a major emitter and sets the tone for international cooperation.

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17
Q

What are the four key instruments of U.S. foreign policy?

A

Diplomacy, military power, intelligence, and economic exchange (aid and trade).

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18
Q

What is the core goal of foreign policy?

A

Advancing the national interest, especially in terms of security and economic prosperity.

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19
Q

What role does foreign aid play in national security?

A

It builds alliances, stabilizes developing nations, and reduces the risk of conflict.

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20
Q

What is monetary policy?

A

The use of interest rates and money supply control (managed by the Federal Reserve) to influence inflation and economic growth.

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21
Q

Q: What is the primary goal of the Federal Reserve (the Fed)?

A

A: To maintain stable prices, full employment, and moderate long-term interest rates.

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22
Q

Q: How does the Fed fight inflation?

A

Its decisions do not require presidential or congressional approval, helping it resist short-term political pressures.

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23
Q

What is supply-side economics?

A

The theory that tax cuts and reduced regulation will increase production and spur economic growth.

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24
Q

What is demand-side economics?

A

The theory that government spending and increased demand drive economic growth.

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25
What is a trade deficit?
When a country imports more goods and services than it exports.
26
What is the World Trade Organization (WTO)?
An international body that regulates trade between nations and settles trade disputes.
27
What is the role of foreign aid in economic policy?
To support development, build alliances, and promote global stability.
28
Why is trade policy a national security issue?
Because economic interdependence can strengthen alliances or create vulnerabilities.
29
Media Framing
How news shapes public views by presenting political conflict.
30
Partisan Polarization
Increasing ideological gap between Democrats and Republicans.
31
Concentrated Benefit / Diffuse Cost
Politically popular subsidies (e.g., clean energy support).
32
Concentrated Cost / Diffuse Benefit
Small group pays, public benefits (e.g., carbon regulation).
33
Carbon Tax
Tax on emissions to reduce fossil fuel use.
34
Why do elected officials prefer agency-based regulation?
It lets them shift blame while still achieving policy goals.
35
What role did media play in climate polarization?
It gave equal coverage to both sides, fueling partisan divides.
36
What was the impact of the Kyoto Protocol?
It polarized U.S. politics; signed by Clinton, rejected by Bush.
37
Why is climate change hard to regulate?
It affects many sectors, is global, and less visible than past pollution problems.
38
What was Dodd-Frank's purpose?
To impose tighter regulations on financial institutions after the 2008 crisis.
39
What was the FDA's failure with Vioxx?
It approved the drug despite incomplete testing, leading to deaths and a $5B settlement by Merck.
39
What is agency capture?
When regulators become too close to the industries they regulate and act in their interest.
40
What did the FTC do in the Staples-Office Depot merger?
Blocked it to prevent a monopoly in office supply markets.
41
What are negative externalities?
Uncompensated costs imposed on society by businesses (e.g., pollution).
42
What is moral hazard?
When one party takes a risk but passes the cost onto another (e.g., banks selling risky mortgages).
43
What is inequity in business transactions?
When one party hides key information, giving them an unfair advantage (e.g., defective airbags).
44
What is restraint of trade?
When a firm gains a monopoly or near-monopoly, limiting competition and raising prices.
45
What sectors are commonly regulated?
Food, drugs, auto safety, environmental practices, and more.
46
Why is regulatory policy politically controversial?
Because it imposes costs on businesses, which are often passed to consumers.
47
What is the role of foreign aid in economic policy?
To support development, build alliances, and promote global stability.
48
What is the World Trade Organization (WTO)?
An international body that regulates trade between nations and settles trade disputes.
49
What are income stabilization programs?
Government initiatives that protect farmers from severe income drops due to market volatility.
50
Why is U.S. leadership important in addressing climate change?
The U.S. is a major emitter and sets the tone for international cooperation.
51
NHTSA
Regulates vehicle safety; enforced Takata airbag recall.
52
An Inconvenient Truth
Al Gore’s film on climate change; influenced public opinion.
53
Over-regulation
Excessive rules that can unnecessarily burden economic activity and innovation.
54
Under-regulation
A lack of sufficient rules to protect the public from harmful business practices.
55
Anti-tobacco Regulation
Policies such as warning labels and public smoking bans that have halved U.S. smoking rates since the 1960s.
56
Concentrated Cost / Diffuse Benefit
Small group pays, public benefits (e.g., carbon regulation).
57
Concentrated Benefit / Diffuse Cost
Politically popular subsidies (e.g., clean energy support).
58
Subprime Mortgages
Risky loans granted during relaxed financial regulation.
59
Moral Hazard
Risk shifted from decision-maker to others (e.g., banks during 2008).
60
Inequity
Unfair transactions; e.g., hidden product defects.
61
Restraint of Trade
Monopolistic behavior; regulated to protect competition.
62
Sherman Antitrust Act
1890 law used to break up monopolies like Standard Oil
63
Regulatory Policy
Government actions to reduce harm from business activity.
64
What is Efficiency?
Fulfillment of society’s needs with as few of its resources as possible. The greater the output for a given input, the greater the efficiency.
65
What is 'economic efficiency '?
Results when the output of goods and services is the highest possible given the amount of input (such as labor and materials) used to produce it.
66
Interstate Commerce Commission
It was a United States federal regulatory agency established in 1887 to oversee the railroad industry. It was the first independent regulatory commission in the U.S., playing a significant role in regulating interstate transportation, including railroads, buses, and trucking.
67
Economic Equity
It occurs when an economic transaction is fair to each party
68
What is a Diffuse Benefit?
A benefit that is spread across the entire public
69
What is a Concentrated Benefit?
A benefit aimed at helping a particular group or interest
70

US Policy (3 decks)

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