AP Government Chapter 4 Vocabulary

Agenda

a list of potential policy ideas, bills, or plans to improve society

Fiscal Policy

Government policy that attempts to manage the economy by controlling taxing and spending.

Supply Side Economics

An economic philosophy that holds the sharply cutting taxes will increase the incentive people have to work, save, and invest. Greater investments will lead to more jobs, a more productive economy, and more tax revenues for the government.

Sixteenth Amendment

Explicitly permitted Congress to levy an income tax.

Internal Revenue Service

The branch of the U.S. Treasury Department in charge of collecting taxes

Progressive Tax

A tax for which the percentage of income paid in taxes increases as income increases

Flat Tax

a tax system in which all people pay the same percentage of their income

Monetary Policy

Government policy that attempts to manage the economy by controlling the money supply and thus interest rates.

Inflation

A general and progressive increase in prices

Federal Reserve

A seven-member board that sets member banks reserve requirements, controls the discount rate, and makes other economic decisions.

Bonds

Certificates of debt that carry a promise to buy back the bonds at a higher price

Discount Rate

The interest rate on the loans that the Fed makes to banks

Reserve Requirement

the percentage of deposits that banking institutions must hold in reserve

North American Free Trade Agreement

Agreement that allows the opening of borders between the United States, Mexico, and Canada.

Social Welfare

programs to help certain groups of people

Mandatory Spending

Required govt spending by permanent laws

Entitlements

A claim for government funds that cannot be abridged without violating the rights of the claimant; for example, social security benefits or payments on a contract.

Social Security Act of 1935

Created both the Social Security Program and a national assistance program for poor children, usually called AFDC.

Medicare

A federal program of health insurance for persons 65 years of age and older

Medicaid

A federal and state assistance program that pays for health care services for people who cannot afford them.

Patient Protection and Affordable Care Act

health care reform law passed in 2010 that includes incentives and penalties for employers providing health insurance as a benefit

political ideology

a set of beliefs about the desired goals and outcomes of the processes of government

party ideology

a party's philosophy about the proper role of government and its set of positions on major issues

party identification

an individual's attachment to a political party

Conservatism

an ideology favoring more control of social behavior, fewer regulations on businesses, and less government interference in the economy

Liberalism

an ideology favoring less government control over social behavior and more regulation of businesses and of the economy

Libertarian

One who believes in limited government interference in personal and economic liberties