Unit V Public Policy Vocabulary Chapters 15-17

1. Unit V Public Policy Vocabulary Chapters 15-17

2. Q1. Public policy process

3. A1. The political interactions that lead to the emergence and resolution of public policy issues.

4. Q2. A system of production and consumption of goods and services that are allocated through exchange among producers and consumers

5. A2. economy

6. Q3. A classic economic philosophy that holds that owners of business should be allowed to make their own production and distribution decisions without government regulation or control

7. A3. laissez-faire doctrine

8. Q4. A term that refers to government restrictions on the economic practices of private firms.

9. A4. regulation

10. Q5. An economic principle that holds that firms should fulfill as many of society’s needs as possible while using as few of its resources as possible. The greater the output (production) for a given input (for example, an hour of labor), the more efficient the process

11. A5. efficiency

12. Q6. Burdens that society incurs when firms fail to pay the full costs of production. An example is the pollution that results when corporations dump industrial wastes into lakes and rivers

13. A6. externalities

14. Q7. The rescinding of excessive government regulations for the purpose of improving economic efficiency

15. A7. deregulation

16. Q8. equity (in relation to economic policy)

17. A8. The situation in which the outcome of an economic transaction is fair to each party. An outcome can usually be considered fair if each party enters into a transaction freely and is not unknowingly at a disadvantage

18. Q9. A tool of economic management by which government attempts to maintain a stable economy through its taxing and spending policies

19. A9. fiscal policy

20. Q10. When the government spends more than it collects in taxes and other revenues

21. A10. deficit spending

22. Q11. A very severe and sustained economic downturn. They are very rare in the United States; the last one was in the 1930s

23. A11. economic depression

24. Q12. A moderate but sustained downturn in the economy. (Two consecutive quarters in which GDP decreases) They are part of the normal cycle of ups and downs

25. A12. economic recession

26. Q13. demand-side economics

27. A13. A form of fiscal policy that emphasizes “demand” (consumer spending). Government can use increased spending or tax cuts to place more money in consumers’ hands and thereby increase demand

28. Q14. budget deficit

29. A14. The situation when the government’s expenditures exceed its tax and other revenue

30. Q15. The total cumulative amount that the U.S. government owes to creditors

31. A15. national debt

32. Q16. Situation when the government’s tax and other revenues for the year are roughly equal to its expenditures

33. A16. balanced budget

34. Q17. budget surplus

35. A17. Situation when the government’s tax and other revenues exceed its expenditures

36. Q18. A form of fiscal policy that emphasizes “supply” (production). An example is a tax cut for business

37. A18. supply-side economics

38. Q19. capital-gains tax

39. A19. The tax that individuals pay on money gained from the sale of a capital asset, such as property or stocks

40. Q20. A general increase in the average level of prices of goods and services

41. A20. inflation

42. Q21. graduated personal income tax

43. A21. A tax on personal income in which the tax rate increases as income increases; in other words, the tax rate is higher for higher income levels

44. Q22. A tool of economic management, to available to government, based on manipulation of the amount of money in circulation; tools include the reserve requirement, discount rate, and open market operations.

45. A22. monetary policy

46. Q23. political agenda

47. A23. Issues that people believe require governmental action

48. Q24. A burden that people believe they must bear if a policy is enacted

49. A24. cost

50. Q25. A satisfaction that people believe they will enjoy if a policy is adopted