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AP GOV CPHS CHAP 18

AP GOVT. CPHS CHAP. 18

QuestionAnswer
Business Cycles Fluctuation between expansion and recession that is a part of modern capitalist economies.
Laissez-Faire A French term literally meaning "to allow to do, to leave alone." It is a hands-off governmental policy that is based on the belief that governmental involvement in the economy is wrong.
Interventionist State Alternative to the laissez-faire state; the government takes an active role in guiding and managing the private economy.
Economic Regulation Governmental regulation of business practices, industry rates, routes, or areas serviced by particular industries.
Social Regulation Governmental regulation of the quality and safety of products as well as the conditions under which goods and services are produced.
Economic Stability A situation in which there is economic growth, rising national income, high employment, and steadiness in the general level of prices.
Inflation A rise in the general price levels of an economy.
Recession A short-term decline in the economy that occurs as investment sags, production falls off, and unemployment increases.
Monetary Policy A form of government regulation in which the nation's money supply and interest rates are controlled.
Money A system of exchange for goods and services that includes currency, coins, and bank deposits.
Federal Reserve Board A seven-member board that sets member banks' reserve requirements, controls the discount rate, and makes other economic decisions.
Reserve Requirements Governmental requirements that a portion of member banks' deposits must be retained to back loans made.
Discount Rate The rate of interest at which member banks can borrow money from their regional Federal Reserve Bank.
Open Market operations The buying and selling of government securities by the Federal Reserve Bank in the securities market.
Fiscal Policy Federal government policies on taxes, spending, and debt management, intended to promote the nation's macroeconomic goals, particularly with respect to employment, price stability, and growth.
Gross Domestic Product (GDP) The total market value of all goods and services produced in a country during a year.
Created by: Rebecca3
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