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an economic system in which individuals and corporations, not the government, own the principal means of production and seek profits.
An economic system in which the government is deeply involved in economic decisions through its role as regulator, consumer, subsidizer, taxer, employer and borrower.
- Has some corporations (USPS/Amtrack)
- Regulate- (Osha, taxing, irs)
- Determine employee rights
Business with vast holdings in many countries, many of which have annual budgets exceeding that of many foreign governments.
securities and Exchange commission (SEC)
The federal agency created during the New Deal that regulates stock fraud.
the legal minimum hourly wage for large employers.
An organization of workers intended to engage in collective bargaining
Negotiations between representatives of labor unions and management to determine pay and acceptable working conditions
As measured by the Bureau of Labor Statistics, the proportion of the labor force actively seeking work but unable to find jobs.
The rise in prices for consumer goods
Consumer price index
the key measure of inflation that relates the rise in prices over time.
the principal that government should not meddle in the economy.
Based on monetarism, monetary policy is the manipulation of the supply of money and credit in private hands by which the government can control the economy. This is the key to economic health.
An economic theory holding that the supply of money is the key to a nation's economic health, Monetarists believe that too much cash and credit in circulation produces inflation.
Federal Reserve System
The main instrument for making monetary policy in the United States. It was created by Congress in 1913 to regulate the lending practices of banks and thus the money supply. 7 members are the board of Governors which control the supply of money (they are nominated by the president, and confirmed by the senate).
The policy that describes the impact of the federal budget -taxes, spending, and borrowing- on the economy. This is almost entirely determined by Congress and the president, who are the budget makers.
Keynesian economic theory
The theory emphasizing that government spending and deficits can help the economy weather its normal ups and downs. Proponets of this theory advoacate using the power of the government to stimulate the economy when it is lagging.
An economic theory advocated by President Reagan holding that too much income goes to taxes so that too little money is available for purchasing and that the solution is to cut taxes and return purchasing power to consumers.
- Economic policy of shielding an economy from imports.
- Letting your nation's economy grow while trying to decrease competition from imports.
World Trade Organization
Organization that regulates international trade. Promotes free trade.
CPI : Consumer Price index
This number (usually a percentage) is the change in the cost of buying a fixed basket of goods and services. Annually changes about 4% a year. Measures Inflation
A policy designed to ensure competition and prevent monopoly, which is the control of a market by one company. Prevents restraints on trade and is regulated by the justice department (Attorney general, federal courts)
Food and Drug Administration
Formed in 1913. Considered first regulatory bureaucracy. Approves all food product and drugs sold in US. All drugs, with the exception of tobacco, must be approved by this.
National Labor Relations Act
A 1935 law, also known as the Wagner Act, that guarantees workers the right of collective bargaining, sets down rules to protect unions and organizers, and created the _______ to regulae labor management relations.
the blank: National labor Relations Board
How the feds control economy with monetary policy
- A. Sets discount rates for money that banks borrow form the Federal Reserve.
- B. Set reserve requirements that determine the amount of money banks must keep at all times (leverage)
- C. Buy and sell securities in the market to control the amount of money available.
Everyone pays the same rate
depending on how much you make, you pay at a higher rate
controlling the economy
implementation of policies, regulations, and laws; takes a while to be able to analyze how well these polices work.
- Private sector is larger than the public sector.
- Budget has a large section that's uncontrollable (social security)
people seeking to work but are unable to find employment (does NOT include discouraged workers)
Federal Trace Commission (FTC)
Regulates trade, labeling, and advirtising
Taft-Hartley Act of 1947
continued to guarantee unions the right of collective bargaining, but prohibited various unfair practices by unions as well, gave the president power to halt major strikes by seeking court injunction for an 80 day cool off period, and allowed states to adopt "right-to-work" laws
The Keynesian approach to fiscal policy
- comes out of the great depression supports New Deal laws. States that it is the government's job to increase the demand when necissary (depression or reciiiession) and supply will take care of itslef.
- stimulate the economy byspending