Public policy – A specific course of action taken by government to achieve a public goal.
Policy agenda – The informal list of issues that Congress and the president consider most important for action.
Distributive policy – A type of policy that provides benefits to all Americans.
Redistributive policy – A type of policy that takes benefits (usually through taxes) from one group of Americans and gives them to another (usually through spending).
Rule – The precise legal definition of how government will implement a policy.
Iron triangle – A policy-making alliance that involves a very strong ties among a congressional committee, an interest group, and a Federal Department or agency.
Issue network – A policy-making alliance among loosely connected participants that comes together on a particular issue, then disbands.
Fiscal policy – Government policy that attempts to manage the economy by controlling taxing and spending.
Monetary policy – Government policy that attempts to manage the economy by controlling the money supply and thus interest rates.
Inflation – A rise in the general price level (and decrease in dollar value) owing to an increase in the volume of money and credit in relation to available goods.
Unemployment – The number of Americans who are out of work but actively looking for a job. The number does not usually include those who are not looking.
Excise tax – Consumer tax on a specific kind of merchandise, such as tobacco.
Deficit – The difference between the revenues raised annually from sources of income other than borrowing and the expenditures of government, including paying the interest on past borrowing.
Tariff – Tax levied on imports to help protect the nation’s industries, labor, or farmers from foreign competition. It can also be used to raise additional revenue.
Progressive tax – A tax graduated so that people with higher incomes pay larger fraction of their income than people with lower incomes.
Regressive tax – A tax whereby people with lower incomes pay a higher fraction of their income than people with higher incomes.
National debt – The total amount of money the Federal government has borrowed to finance deficit spending over the years.
Office of Management and Budget (OMB) – Presidential staff agency that serves as a clearinghouse for budgetary requests and management improvements for government agencies.
Congressional Budget Office (CBO) – An agency of Congress that analyzes presidential budget recommendations and estimates the cost of proposed legislation.
Sales tax – General tax on sales transactions, sometimes exempting food and drugs.
Value-added tax (VAT) – A tax on increased value of the product at each stage of production and distribution rather than just at the point of sale.
Tax expenditure – Loss of tax revenue due to Federal laws that provide special tax incentives or benefits to individuals or businesses.
Monetarism – A theory that government should control the money supply to encourage economic growth and restrain inflation.
Federal Reserve System – The system created by Congress in 1913 to establish banking practices and regulate currency in circulation and the amount of credit available. It consists of 12 regional banks supervised by the Board of Governors. Often called simply the Fed.
Laissez-faire economics – Theory that opposes governmental interference in economic affairs beyond what is necessary to protect life and property.
Keynesian economics - Economic theory based on the principles of John Maynard Keynes stating that government spending should increase during business slumps and be curbed during booms.
Trade deficit – An imbalance in international trade in which the value of imports exceeds the value of exports.
World Trade Organization (WTO) – International organization derived from the General Agreement on Tariffs and Trade (GATT) that promotes it free trade around the world.
General Agreement on Tariffs and Trade (GATT) – An international trade organization with more than 130 members, including the United States and the People’s Republic of China, that seeks to encourage free trade by lowering tariffs and other trade restrictions.
North American Free Trade Agreement (NAFTA) – Agreement signed by the United States, Canada, and Mexico in 1992 to form the largest free trade zone in the world.
Protectionism - Policy of erecting trade barriers to protect domestic industry.
Offshoring – The practice of exporting U.S. jobs to lower paid employees in other nations.
Regulation – Efforts by government to alter the free operation of the market to achieve social goals such as protecting workers and the environment.
Monopoly - Domination of an industry by a single company; also the company that dominates the industry.
Antitrust legislation – Federal laws (starting with the Sherman Antitrust Act of 1890) that try to prevent a monopoly from dominating an industry and restraining trade.
Trust – A monopoly that controls goods and services, often in combinations that reduce competition.
Closed shop - A company with a labor agreement under which union membership is a condition of employment.
Union shop – A company in which new employees must join a union within a stated time period.
Labor injunction – A court order forbidding specific individuals or groups from performing certain acts (such as striking) that the court considers harmful to the rights and property of an employer or community.
Collective bargaining – Method whereby representatives of the union and employer determine wages, hours, and other conditions of employment through direct negotiation.
Environmental impact statement – Statement required by Federal law from all agencies for any project using Federal funds to assess the potential affect of the new construction or development on the environment.
Deregulation – A policy promoting cutbacks in the amount of Federal regulation in specific areas of economic activity.
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