Chapter 18 Roots of Economic Policy Flashcards
Fluctuations between periods of economic growth and recession, or periods of boom and bust.
buisness cycles
A French term meaning “to allow to do, to leave alone.” It holds that active governmental involvement in the economy is wrong.
laissez-faire
Alternative to the laissez-faire state; the govenment took an active role in guiding and regulating the private economy.
interventionist state
Government regulation of buisness practices, industry rates, routes, or areas serviced by particular industries.
economic regulation
Government regulation of consumer protection, health and safety, and environmental protection.
social regulation
A reduction in market controls (such as price fixing, subsidies, or controls on who can eneter the feild) in favor of market-based competition.
deregulation
The deliberate use of the national government’s taxing and spending policies to maintain economic stability
fiscal policy
The total market value of all goods and services produced in an area during a year.
gross domestic product (GDP)
The economic condition that occurs when expenditures exceed revenues.
budget deficit
A rise in the general price levels of an economy
inflation
A form of government regulation in which the nation’s money supply and interest rates are controlled
monetary policy
In the Federal Reserve System, a seven-member board that makes most economic decisions regarding interest rates and the supply of money.
Board of Governors
Government requirements that a portion of member banks’ deposists be retained as backing for their loans.
reserve requirements
The rate of interest at which the Federal Reserve Board lends money to member banks.
discount rate
The buying and selling of government securities by the Federal Reserve Bank.
open market operations
