Economics Lesson 12 Flashcards

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Questions and Answers

What type of economy does the United States have?

Mixed economy

Why does the government regulate the economy?

To control big fluctuations

What is fiscal policy? How does it affect the economy?

Government taxing and spending

What is monetary policy? How does it affect the economy?

Involves the money supply Signup and view all the answers

What is the biggest job of the US Congress each year? Why?

Budget Signup and view all the answers

Why should people care about foreign policy?

It can affect our economy and physical security. Signup and view all the answers

Who makes foreign policy for the United States?

President and his advisers, Congress, interest groups Signup and view all the answers

How is the military used in foreign policy?

Use/threat of force Signup and view all the answers

How are economic strategies used in foreign policy?

Treaties, free trade agreements, and economic sanctions Signup and view all the answers

Explain what is meant by a mixed economy.

Features of capitalism, government ownership, and government regulation Signup and view all the answers

Explain why Americans accept, even expect, some government regulation of the economy.

Due to the Great Depression and the New Deal programs Signup and view all the answers

Briefly explain fiscal and monetary policy. Which government personnel are responsible for implementing each type of policy?

Fiscal policy is taxing and spending made by the president and Congress; monetary policy is money supply controlled by the Federal Reserve Board. Signup and view all the answers

Explain the difference between mandatory spending and discretionary spending.

Mandatory spending is set by law; discretionary spending can be adjusted. Signup and view all the answers

What are the three techniques of public control addressed in the textbook?

Promotional, regulatory, redistributive Signup and view all the answers

What are contributory programs? Give two examples.

Social programs financed by taxation; examples: Social Security, Medicare. Signup and view all the answers

What is a process that requires applicants to show financial need for public assistance called?

Means testing Signup and view all the answers

What are programs that provide assistance based on need rather than contribution?

Noncontributory programs Signup and view all the answers

Senior citizens receive roughly what fraction of all federal dollars? Which two programs make up most of that spending?

7.65 percent; Social Security and Medicare Signup and view all the answers

Study Notes

Economy Overview

The United States operates a mixed economy, combining elements of capitalism and socialism.
Government regulation is essential to prevent significant economic fluctuations, fostering public trust in its role.

Fiscal Policy

Fiscal policy encompasses government taxation and spending strategies.
Government spending injects money into the economy, while taxation removes it.
Reducing taxes and increasing spending can stimulate economic growth.

Monetary Policy

Monetary policy relates to the management of the money supply in the economy.
Increasing money supply is believed to boost economic activity, while decreasing it is thought to slow down the economy.

Congressional Budget Role

The primary responsibility of the U.S. Congress annually is to create the budget.
The budget holds symbolic importance in defining national priorities and is crucial for government operations to avoid shutdowns.

Foreign Policy Importance

Foreign policy impacts domestic economy and national security.
Global events can have direct consequences on the U.S. economy and safety.

Creation of Foreign Policy

U.S. foreign policy is developed by the president, advisers, Congress, interest groups, think tanks, and influential elites.

Military Use in Foreign Policy

The military is used as a tool for persuasion in international relations, often leveraging the threat or use of force.

Economic Strategies in Foreign Policy

Economic strategies include treaties, free trade agreements, and sanctions to incentivize foreign compliance.
Military action may follow should economic strategies fail.

Mixed Economy Definition

A mixed economy blends capitalism with government ownership and regulation to balance market and social needs.

Expectation for Regulation

Historical context from the Great Depression and the New Deal established American expectations for government intervention in economic crises.

Fiscal vs. Monetary Policy Implementation

Fiscal policy, tied to government taxation and spending, is handled by the president and Congress.
Monetary policy, controlling the money supply, is managed by the Federal Reserve Board.

Spending Types

Mandatory spending: Fixed obligations (Social Security, Medicare) that the government is required to fund.
Discretionary spending: Flexible expenditures, which Congress can adjust annually.

Public Control Techniques

Three main techniques of public control: promotional, regulatory, and redistributive.

Contributory Programs

Social programs funded by taxes or mandatory contributions from beneficiaries are called contributory programs.
Examples include Social Security and Medicare.

Means Testing

A process requiring applicants to demonstrate financial need to qualify for public assistance is known as means testing.

Noncontributory Programs

Assistance programs available based on need rather than previous contributions are classified as noncontributory programs.

Federal Spending on Seniors

Senior citizens account for approximately 7.65% of total federal expenditure, primarily through Social Security and Medicare programs.

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Description

This quiz covers key concepts from Economics Lesson 12. It focuses on the mixed economy of the United States, the role of government regulation, and the impact of fiscal policy. Test your understanding of these essential economic principles.