Q1. Public policy process

A1. The political interactions that lead to the emergence and resolution of public policy issues.

Q2. A system of production and consumption of goods and services that are allocated through exchange among producers and consumers

A2. economy

Q3. A classic economic philosophy that holds that owners of business should be allowed to make their own production and distribution decisions without government regulation or control

A3. laissez-faire doctrine

Q4. A term that refers to government restrictions on the economic practices of private firms.

A4. regulation

Q5. An economic principle that holds that firms should fulfill as many of society’s needs as possible while using as few of its resources as possible. The greater the output (production) for a given input (for example, an hour of labor), the more efficient the process

A5. efficiency

Q6. Burdens that society incurs when firms fail to pay the full costs of production. An example is the pollution that results when corporations dump industrial wastes into lakes and rivers

A6. externalities

Q7. The rescinding of excessive government regulations for the purpose of improving economic efficiency

A7. deregulation

Q8. equity (in relation to economic policy)

A8. The situation in which the outcome of an economic transaction is fair to each party. An outcome can usually be considered fair if each party enters into a transaction freely and is not unknowingly at a disadvantage

Q9. A tool of economic management by which government attempts to maintain a stable economy through its taxing and spending policies

A9. fiscal policy

Q10. When the government spends more than it collects in taxes and other revenues

A10. deficit spending

Q11. A very severe and sustained economic downturn. They are very rare in the United States; the last one was in the 1930s

A11. economic depression

Q12. A moderate but sustained downturn in the economy. (Two consecutive quarters in which GDP decreases) They are part of the normal cycle of ups and downs

A12. economic recession

Q13. demand-side economics

A13. A form of fiscal policy that emphasizes “demand” (consumer spending). Government can use increased spending or tax cuts to place more money in consumers’ hands and thereby increase demand

Q14. budget deficit

A14. The situation when the government’s expenditures exceed its tax and other revenue

Q15. The total cumulative amount that the U.S. government owes to creditors

A15. national debt

Q16. Situation when the government’s tax and other revenues for the year are roughly equal to its expenditures

A16. balanced budget

Q17. budget surplus

A17. Situation when the government’s tax and other revenues exceed its expenditures

Q18. A form of fiscal policy that emphasizes “supply” (production). An example is a tax cut for business

A18. supply-side economics

Q19. capital-gains tax

A19. The tax that individuals pay on money gained from the sale of a capital asset, such as property or stocks

Q20. A general increase in the average level of prices of goods and services

A20. inflation

Q21. graduated personal income tax

A21. A tax on personal income in which the tax rate increases as income increases; in other words, the tax rate is higher for higher income levels

Q22. A tool of economic management, to available to government, based on manipulation of the amount of money in circulation; tools include the reserve requirement, discount rate, and open market operations.

A22. monetary policy

Q23. political agenda

A23. Issues that people believe require governmental action

Q24. A burden that people believe they must bear if a policy is enacted

A24. cost

Q25. A satisfaction that people believe they will enjoy if a policy is adopted

Q25. benefit

Q26. majoritarian politics

A26. A policy in which almost everybody benefits and almost everybody pays

Q27. interest group politics

A27. A policy in which one small group benefits and another small group pays

Q28. client politics

A28. A policy in which one small group benefits and almost everybody pays

Q29. entrepreneurial politics

A29. A policy in which almost everybody benefits and a small group pays the cost

Q30. policy entrepreneurs

A30. Activists in or out of government who pull together a political majority on behalf of unorganized interests

Q31. The market value of all final goods and services produced in the United States during a given year

A31. gross domestic product

Q32. The use of supply-side theory, taxes were reduced, government regulation reduced, government spending reduce (except) military, and money supply controled

A32. Reaganomics

Q33. A document that states tax collections, spending levels, and the allocation of spending among purposes

A33. budget

Q34. For the federal government, October 1 through the following September 30

A34. fiscal year

Q35. budget resolution

A35. A congressional decision that states the maximum amount of money the government should spend

Q36. sequester

A36. Automatic spending cuts

Q37. An economic system in which individuals and corporations, not government, own the principal means of production and seek profit

A37. capitalism

Q38. Negotiations between representatives of labor unions and management to determine acceptable working conditions

A38. collective bargaining

Q39. As measured by the Bureau of Labor Statistics (BLS), the proportion of the labor force actively seeking work but unable to fine jobs

A39. unemployment rate

Q40. Keynesian economic theory

A40. The theory emphasizing that government spending and deficits can help the economy weather its normal ups and downs. Proponents of this theory advocate using the power of government to stimulate the economy when it is lagging

Q41. poverty line

A41. As defined by the federal government, the annual cost of a thrifty food budget for an urban family of four, multiplied by three to allow also for the cost of housing, clothes, and other expenses. Families below the poverty line are considered poor and are eligible for certain forms of public assistance

Q42. negative government

A42. The philosophical belief that government governs best by staying out of people’s lives, giving individuals as much freedom as possible to determine their own pursuits

Q43. positive government

A43. The philosophical belief that government intervention is necessary in order to enhance personal liberty and security when individuals are buffeted by economic and social forces beyond their control

Q44. Government benefits that are given directly to individuals. These payments may be either cash transfers, such as Social Security payments and retirement payments to former government employees, or in-kind transfers, such as food stamps and low- interest loans for college education

A44. transfer payments

Q45. Any of a number of individual- benefit programs, such as social security, that require government to provide a designated benefit to any person who meets the legally defined criteria for eligibility

A45. entitlement programs

Q46. social insurance

A46. Social welfare programs based on the “insurance” concept, requiring that individuals pay into the program in order to be eligible to receive funds from it. An example is social security for retired people, unemployment insurance, and medicare

Q47. public assistance

A47. A term that refers to social welfare programs funded through general tax revenues and available only to the financially needy. Eligibility for such a program is established by a means test. These programs include Temporary Assistance for Needy Families (TANF), food stamps, subsidized housing, and medicaid

Q48. The requirement that applicants for public assistance must demonstrate that they are poor in order to be eligible for the assistance

A48. means test

Q49. A government benefit that is a cash equivalent, such as food stamps or rent vouchers. This form of benefit ensures that recipients will use public assistance in a specified way

A49. in-kind benefit

Q50. effective tax rate

A50. The actual percentage of a person’s income that is spent to pay taxes

Q51. The idea that all individuals should be given an equal chance to succeed on their own

A51. equality of opportunity

Q52. charitable choice

A52. Name given to four federal laws passed in the late 1990s specifying the conditions under which nonprofit religious organizations could compete to administer certain social service delivery and welfare programs

Q53 Major Social Welfare Programs Insurance, or “Contributory”, Programs o Old Age, Survivors, and Disability Insurance (OASDI) Monthly payments to retired or disabled people and to surviving members of their families. This program, popularly called Social Security, is paid for by a payroll tax on employers and employees. (No means test) o Medicare Federal government pays for part of the cost of medical care for retired or disabled people covered by Social Security. Paid for by payroll taxes on employees and employers. (No means test)

Q53 Major Social Welfare Programs Assistance, or “Noncontributory” Programs o Unemployment Insurance (UI) Weekly payments to workers who have been laid off and cannot find work. Benefits and requirements determined by states. Paid for by taxes on employers. (No means test) o Temporary Assistance for Needy Families (TANF) Payments to needy families with children. Replaced the old AFDC program. Partially paid for by block grants from the federal government to the states. (Means test) o Supplemental Security Income (SSI) Cash payments to aged, blind, or disabled people whose income is below a certain amount. Paid for from general federal revenues. (Means test) o Food Stamps Vouchers given to people whose income is below a certain level, that can be used to buy food at grocery stores. Paid for out of general federal revenues. (Means test) o Medicaid Pays medical expenses of persons receiving TANF or SSI payments (Means test) o Earned Income Tax Credit (EITC) A provision of a 1975 law that entitles working families with children to receive money from the government if their total income is below a certain level.

Q54. social welfare policies

A54. Policies that provide benefits to individuals, particularly to those in need.

Q55. income distribution

A55. The “shares” of the national income earned by various groups

Q56. A tax by which the government takes a greater share of the income of the rich than of the poor. The more you make, the more you pay, as a percentage of your income. Example: income tax o High income: 30 % o Middle income: 20% o Low income: 10%

A56. progressive tax

Q57. A tax by which the government takes the same share of income from everyone, rich and poor alike. Often called a flat tax. o High income: 20 % o Middle income: 20% o Low income: 20%

A57. proportional tax

Q58. A tax in which the burden falls relatively more heavily upon low- income groups than upon wealthy taxpayers. The opposite of a progressive tax, in which tax rates increase as income increases. The more you make, the less you pay, as a percentage of your income. Example: sales tax o High income: 10 % o Middle income: 20% o Low income: 30%

A58. regressive tax

Q59. Describes the view that the country should deliberately avoid a large role in world affairs and instead concentrate on domestic concerns

A59. isolationist

Q60. Describes the view that the country should involve itself deeply in world affairs

A60. internationalist

Q61. A doctrine, developed after World War II, based on assumptions that the Soviet Union was an aggressor nation and that only a determined United States could block Soviet territorial ambitions

A61. containment

Q62. The lengthy period after World War II when the United States and the Soviet Union were not engaged in actual combat (a “hot war”) but were locked in a state of deep-seated hostility

A62. cold war

Q63. A power structure dominated by two powers only, as in the case of the United States and the Soviet Union during the cold war

A63. bipolar (power structure)

Q64. A power structure dominated by a single powerful actor, as in the case of the United States after the collapse of the Soviet Union

A64. unipolar (power structure)

Q65. multilaterralism

A65. The situation in which nations act together in response to problems and crises

Q66. preemptive war doctrine

A66. The idea, espoused by President George W. Bush, that the United States could attack a potentially threatening nation even if the threat had not yet reached a serious and immediate level

Q67. The situation in which one nation takes action against another state (nation) or states (nations)

A67. unilateralism

Q68. deterrence policy

A68. The idea that nuclear war can be discouraged if each side in a conflict has the capacity to destroy the other with nuclear weapons

Q69. The three components (the military establishment, the industries that manufacture weapons, and the members of Congress from states and districts that depend heavily on the arms industry) that mutually benefit from a high level of defense spending

A69. military-industrial complex

Q70. Business firms with major operations in more than one country

A70. multinational corporations

Q71. economic globalization

A71. the increased interdependence of nations’ economies. The change is the result of technological, transportation, and communication advances that have enabled firms to deploy their resources around the globe

Q72. the view that the long-term economic interests of all countries are advanced when tariffs and other trade barriers are kept to a minimum

A72. free-trade position

Q73. The view that the immediate interests of domestic producers should have a higher priority (through, for example, protective tariffs) than should free trade between nations

A73. protectionism

Q74. worldviews

A74. A comprehensive opinion of how the United States should respond to world problems

Q75. disengagement (or Vietnam) view

A75. The belief that the United States was harmed by its war in Vietnam and so should avoid supposedly similar events

Q76. The view that we should try to improve the lives of people in other countries

A76. doctrine of human rights

Q77. gold plating

A77. The tendency of Pentagon officials to ask weapons contractors to meet excessively high requirements

Q78. environment impact statement

A78. A report required by federal law that assesses the possible effect of a project on the environment if the project is subsidized in whole or part by federal funds

Q79. command-and- control strategy

A79. A strategy to improve air and water quality, involving the setting of detailed pollution standards and rules

Q80. foreign policy

A80. A policy that involves choice taking, like domestic policy, but additionally involves choices about relations with the rest of the world.

Q81. Created in 1945, an organization whose members agree to renounce war and to respect certain human and economic freedoms. The seat of real power is the Security Council in which the United States is a permanent member.

A81. United Nations (UN)

Q82. Created in 1949, an organization whose members include the United States, Canada, most Western European nations, and Turkey, all of whom agreed to combine military forces and to treat a war against one as a war against all

A82. North Atlantic Treaty Organization (NATO

Q83. An alliance of the major Western European nations that coordinates monetary, trade, immigration, and labor policies, making its members one economic unit. An example of a regional organization

A83. European Union (EU)

Q84. A tense relationship beginning in the 1950s between the Soviet Union and the United States whereby one side’s weaponry became the other side’s goad to procure more weaponry and so on.

A84. arms race

Q85. A slow transformation from conflict thinking to cooperative thinking in foreign policy strategy and policymaking. It sought a relaxation of tensions between the superpowers, coupled with firm guarantees of mutual security

A85. detente

Q86. Mutual dependency, in which the actions of nations reverberate and affect one another’s economic lifelines

A86. interdependency

Q87. Often call “Star Wars” by the critics and the press. A plan for defense against the Soviet Union unveiled by President Reagan in It would crate a global umbrella in space, using computers to scan the skies and high- tech devices to destroy invading missiles

A87. Strategic Defense Initiative (SDI)