Chapter 17 - Chapter 17: The Budget and Economic Policies...

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Chapter 17: The Budget and Economic Policies 1. Key Terms: a. Public Policy: i. What government does, usually in the form of new laws and regulations or in the interpretation and implementation os existing laws and regulations. b. Distributive policies: i. Government policies targeted at narrowly defined groups or individuals c. Redistributive policies i. Government policies that transfer resources from one group or class to another d. Regulatory policies: i. Government policies that require a group or class of groups to change its behavior to some public purpose e. Public goods: i. Government policies that provide benefits for everyone f. Efficiency, public policy i. How well resources are used to meet policy objectives g. Effectiveness, public policy: i. The degree to which the objectives of public policies are met h. Inflation: i. A condition of rising prices and reduced purchasing power i. Recession; i. Two quarters of persistent drop in economic activity j. Gross Domestic product (GDP) i. Monetary value of all goods and services produced in a nation each year, excluding income residence earn abroad k. Balance of payments: i. The annual difference between payments and receipts between a country and it trading partners
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l. Externalities: i. The positive and negative effects of economic activities on third parties m. Federal reserve board (Fed) i. The body responsible for deciding the monetary policies of the United States n. Macroeconomic policy i. Policy that has to do with the performance of the economy as a whole o. Fiscal policy: i. Government efforts to affect overall output and incomes in the economy through spending and taking policies p. Monetary policy i. Government efforts to affect the suppy of money and the level of interest rates in the economy q. Keynesians: i. Advocates of government programs to stimulate economic activity through tax cuts and government spending r. Monetarists: i. Advocates of a minimal government roles in the economy, limited to managing the growth of the money supply s. Supply-siders: i. Advocates of supply-side economics featuring low taxes and minimal regulation t. New growth theory: i. The economic theory that ties economic growth to innovation and invention u. Office of management and Budget (OMB) i. Part of the executive office of the president charged with helping the president prepare the annual budget request to congress also performs oversight of rulemaking by executive branch agencies. v. Appropriations committees i. The committees in the house and senate that set specific spending levels in the budget for federal programs and agencies
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w. Deficit hawks: i. People committed to reducing budget deficits x. Discretionary spending: i. The part of the federal budget that is not tied to a formula that automatically provides money to some program or purpose y. Payroll tax: i. Tax levied on salaries and wages for social security and Medicare z. Progressive taxation: i. Tax system in which higher income individuals are taxed at a higher rate than
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Chapter 17 - Chapter 17: The Budget and Economic Policies...

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