Unit 4 Test Review

Is the U.S. a mixed or purely capitalistic economy?

Mixed economy (private market + government regulation & programs)

Democrats

More government regulation, higher taxes on the wealthy, support social programs

Republicans

Less regulation, lower taxes, emphasize free market

Measured by the Bureau of Labor Statistics

the % of people actively looking for work but unable to find it.

Consumer Price Index

Measures inflation by tracking prices of goods/services. Important because it shows cost of living changes.

Keynesian

Government should spend in recessions, focus on demand

Supply-side

cut taxes to encourage investment, focus on business growth

How do Democrats approach economic policy?

More regulation, higher taxes on wealthy, more social spending.

How do Republicans approach economic policy?

Lower taxes, less regulation, free market focus.

How is unemployment measured?

% of people actively looking for work but unable to find it

What does CPI measure?

Inflation (changes in cost of living).

What are the 3 tools of the Federal Reserve System?

1. Open market operations

2. Discount rate

3. Reserve requirement

What is fiscal policy?

Government taxing and spending decisions.

Keynesian economics believes what?

Government should spend during recessions to increase demand.

Supply-side economics believes what?

Cut taxes to encourage business investment and growth.

Why is controlling inflation & unemployment difficult?

Time lag, global economy, political disagreement.

What did the National Labor Relations Act do?

Protected unions and collective bargaining.

What did the Taft-Hartley Act do?

Limited union power.

How does the Food and Drug Administration protect consumers?

Ensures food & drug safety.

How does the Federal Trade Commission protect consumers?

Prevents false advertising & monopolies.

List 4 ways government helps business.

Subsidies, tax breaks, contracts, infrastructure.

What are social welfare policies?

Government programs providing economic assistance.

What is an entitlement program?

Anyone who qualifies must receive benefits.

Examples: Social Security, Medicare, Unemployment Insurance.

What is a means-tested program?

Based on income level.

Examples: Medicaid, SNAP, TANF.

Difference between income and wealth?

Income = yearly earnings.
Wealth = total assets owned.

What is a transfer payment?

Money given without service (ex: Social Security).

What did Franklin D. Roosevelt create in the New Deal?

Social Security, unemployment insurance.

What did Lyndon B. Johnson create in the Great Society?

Medicare & Medicaid.

What did Ronald Reagan emphasize?

Cutting welfare & limiting federal role.

What did Bill Clinton pass in 1996?

Personal Responsibility and Work Opportunity Reconciliation Act
→ Work requirements
→ Time limits
→ States control welfare

What is the main problem with Social Security today?

Aging population → fewer workers paying in.

Argument for Social Security privatization?

Potential higher investment returns.

Argument against privatization?

Market risk & instability.

Why is U.S. healthcare expensive?

Administrative costs, private insurance, technology, drug prices.

What is managed care?

Insurance system controlling costs (HMO networks).

What government programs provide healthcare?

Medicare, Medicaid, ACA.

What influences healthcare policy

Interest groups, cost, public opinion, political ideology

What is the goal of environmental policy?

Protect natural resources & reduce pollution.

Biggest environmental obstacles?

Business resistance, cost, political division.

Main U.S. energy sources?

Oil, natural gas, coal, renewables.

Energy debates focus on what?

Climate change, energy independence, cost.

Who makes foreign policy?

President, Congress, State Department, Defense Department.

What was the Cold War?

U.S. vs Soviet Union ideological conflict (1947–1991).

What is containment?

Stopping the spread of communism.

How did the Cold War end?

Collapse of Soviet Union (1991).

Conservative view of defense spending?

Increase military funding.

Liberal view of defense spending?

Reduce military spending, focus on domestic needs.

Three immigration waves?

1840s, 1890s, post-1965.

What did the Simpson-Mazzoli Act do?

Immigration reform & employer penalties.

Main political socialization agents?

Family, media, school.

Most common political participation activity?

Voting

What is civil disobedience?

Peaceful lawbreaking to protest injustice.

What is the paradox of mass politics?

Most people know little about politics but hold strong opinions.

Progressive tax?

Higher income → higher tax rate.

Regressive tax?

Lower income pays larger % of income.