Chapter 15 - Study Guide

Chapter 15 - Study Guide - POLS 101I American National...

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POLS 101I – American National Government Hagan Chapter Fifteen Economic and Environmental Policy: Contributing to Prosperity Learning Objectives Having read the chapter, the students should be able to do each of the following: 6912. Trace the historical development of the system of government regulation in the United States, and discuss efficiency and equity as these concepts apply to regulation. 6913. Discuss the precise ways that government promotes the interests of business, labor, and agriculture. 6914. Discuss fiscal policy as a means of maintaining a stable economy and distinguish between supply-side and demand-side. 6915. Explain monetary policy as a means of maintaining a stable economy and describe how the Federal Reserve influences the economy. 6916. Trace the development of environmental policy at the federal level. Focus and Main Points The focus of this chapter is on the economic role of the federal government, stressing its promotion and regulation of economic interests and its fiscal and monetary policies that affect economic growth. The main points made in the chapter are as follows: Through regulation, the U.S. government imposes restraints on business activity, which are designed to promote economic efficiency and equity. This regulation is often the cause of political conflict, which is both ideological and group-centered. Through regulatory and conservation policies, the U.S. government seeks to protect and preserve the environment from the effects of business firms and consumers. Through promotion, the U.S. government helps private interests to achieve their economic goals. Business in particular benefits from the government’s promotional efforts, which take place largely in the context of group politics. Through its taxing and spending decisions (fiscal policy), the U.S. government seeks to maintain a level of economic supply and demand that will keep the economy prosperous. The condition of the economy is generally the leading issue in American electoral politics and has a major influence on each party’s success. Through its monetary-supply decisions (monetary policy), the U.S. government—via the Fed—seeks to maintain a level of inflation consistent with sustained controllable economic growth. Chapter Summary Although private enterprise is the main force in the American economic system, the federal government plays a significant role through the policies it selects to regulate, promote, and stimulate the economy. Regulatory policy is designed to achieve efficiency and equity, which require government to intervene, for example, to maintain competitive trade practices (an efficiency goal) and to protect vulnerable
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Chapter 15 - Study Guide - POLS 101I American National...

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