AP Gov Terms - Chapter 16

Social welfare policies

Policies that provide benefits, cash or in-kind to individuals, based on either entitlement or means testing

Unemployment rate

As measured in Bureau of Labor Statistics, the proportion of the labor force actively seeking work but unable to find jobs.

Underemployment rate

As measured by the Bureau of Labor Statistics, a statistic that includes people who aren’t working and are seeking a job, those who would like to work but have given up looking, and those who are working part time because they cannot find a full time position.

Inflation

a rise in price of goods + services

Consumer price index

Key measure of inflation, the change in the cost of buying a fixed basket of goods + services.

Laissez-faire

The principle that government should not meddle in the economy

Monetary policy

Government manipulation of the supply of money in private hands, one of two important tools by which the government can attempt to steer the economy.

Monetarism

Economic theory holding that the supply of money is the key to a nations economic health, with too much cash + credit producing inflation

Federal Reserve System

Main instrument for making monetary policy in U.S. Created by Congress to regulate lending practices of banks + money supply

Fiscal policy

Use of federal budget, taxes, spending + borrowing to influence the economy, along with monetary policy. Determined by Congress + President

Keynesian economic theory

Government spending and deficits can help the economy deal with its ups and downs, proponents of this theory advocate using the power of government to stimulate the economy when it is lagging

Supply-side economics

Theory, applied during Reagan administration, holding that the key task for fiscal policy is to stimulate the supply of goods as by cutting tax rates.

Tariffs

Fees for importing goods into the U.S. from other countries

Entitlement programs

Government programs providing benefits to qualified individuals regardless of need

Means-tested programs

Government programs providing benefits to only individuals who qualify based on specific needs.

Income distribution

Way the national income is divided into shares ranging from the poor to the rich.

Relative deprivation

A perception by an individual that he or she is not doing well economically in comparison to others

Income

The amount of money collected between any two points in time

Wealth

The value of assets owned

Poverty line

Income threshold below which people are called poor, based on what a family must spend for a austere standard of living, 3x the cost of subsistence diet.

Feminization of poverty

Increasing concentration of poverty among women, especially unmarried women + their children

Progressive tax

Tax which government takes greater share of income of the rich than the poor

Proportional tax

tax which the government takes the same share of income from everyone. rich and poor

Regressive tax

tax which the burden falls more on low income groups than wealthy

Earned Income tax credit

EITC, refundable federal income tax credit for low→ moderate income working individuals

Transfer payments

benefits given by gov. directly to individuals (cash, Social Security, food stamps)

Social Security Act

Law intended to provide minimal level of sustenance to older Americans and save them from poverty.

Personal Responsibility + Work Opportunity Reconciliation Act

implemented the Temporary Assistance for Needy Families Program

Temporary Assistance for Needy Families Program

Public assistance to needy families, requires people on welfare to find work within two years + sets a life time maximum of 5 years

Social Security Trust Fund

Account into which Social Security employee and employer contributions are deposited and used to pay out eligible recipients.