AP Government and Politics
Government and the Economy
Key Terms
Public policyPublic goodsGross domestic product (GDP)InflationCategorical grantsMonetary policiesFederal Reserve SystemReserve requirementOpen-market operationsFederal funds rateFiscal policyTariffProgressive taxationRegressive taxationRedistributionLoopholeBudget deficitMandatory spendingUncontrollablesDiscretionary spendingMonopolyAntitrust policyDeregulationSubsidies-
Contracting powerLaissez-faire capitalismKeynesiansMonetaristsSupply-side economicsDeficitNational debt-
Discussion Questions
Identify the broad reasons government gets involved in the economy.
Describe how the government uses monetary, fiscal, and regulatory policies to influence
the economy.
Explain why the government tries to balance economic prosperity with policies that
protect the environment.
Explore why economic policy often controversial.
Trace the history of government programs designed to help the poor
Describe how education, health, and housing policies try to enable people to reach their
potentials.
Explain how contributory and noncontributory programs benefit different groups of
Americans.