AP Government & Politics - Chapter 18: Economic Policy
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1.
deficit
that occurs when the government in one year spends more money than it takes in from taxes
2.
national debt
the total deficit from the first presidency down to the present
gross domestic
product (GDP)
the total of all goods and services produced in the economy during a given year
4.
monetarism
the belief that inflation occurs when too much money is chasing too few goods
5.
Keynesianism
the belief that government must manage the economy by spending more money when in a recession and
cutting spending when there is inflation
6.
economic planning
the belief that government plans, such as wage and price controls or the direction of investment, can improve
the economy
7.
supply-side theory
the belief that lower taxes and fewer regulation will stimulate the economy
8.
Reaganomics
the belief that a combination of monetarism, lower federal spending, and supply-side economics will
stimulate the economy
9.
monetary policy
managing the economy by altering the supply of money and interest rates
10.
fiscal policy
managing the economy by the use of tax and spending laws
11.
budget
a document that states tax collections, spending levels, and the allocation of spending among purposes
12.
fiscal year
for the federal government, October 1 through the following September 30
13.
budget resolution
a congressional decision that states the maximum amount of money the government should spend
14.
entitlements
a claim for government funds that cannot be changed without violating the rights of the claimant
15.
sequester
automatic spending cuts
3.