AP GOV- Chapter 12

SECTION 12.1 KEY TERMS

Party Ideology

  • Definition: A party's philosophy regarding the proper role of government and its stance on major issues.

Party Identification

  • Definition: An individual's attachment to a political party.

Conservatism

  • Definition: An ideology advocating for more control of social behavior, fewer regulations on businesses, and less government interference in the economy.

Liberalism

  • Definition: An ideology supporting less government control over social behavior and greater regulation of business and the economy.

Libertarianism

  • Definition: An ideology favoring minimal government regulation and intervention, primarily to protect private property and individual liberties.

Republicans

  • Association: Tied to conservatism, advocating for increased control of social behavior, reduced regulations on businesses, and minimal government interference in the economy.

Democrats

  • Association: Linked to liberalism, supporting less control of social behavior and increased regulations on businesses and the economy.

SECTION 12.2 KEY TERMS

Laissez-Faire Economy

  • Definition: An economic policy characterized by minimal government interference in economic transactions between citizens and businesses.

Command-and-Control Economy

  • Definition: An economic policy where the government dictates much of the nation's economic activity, including production levels and pricing of goods.

Mixed Economy

  • Definition: An economic policy where many decisions are left to individuals and businesses, while the government regulates economic activity.

Gross Domestic Product (GDP)

  • Definition: The total value of goods and services produced by an economy.

Page 2 Key Economic Terms

Economic Recession

  • Definition: A period characterized by a decline in economic activity, typically defined by two consecutive quarters of negative GDP growth.

Unemployment Rate

  • Definition: The percentage of people actively seeking work who are unable to find jobs.

Inflation

  • Definition: The increase in prices of goods and services over time.

Consumer Price Index (CPI)

  • Definition: The cost of a fixed basket of goods and services over time; used to measure the cost of living.

Fiscal Policy

  • Definition: The government's use of taxes and spending to reduce unemployment, foster economic growth, and stabilize the economy.

MUST KNOW

Key Economic Theories and Events

  • 1776 Adam Smith’s Work: An Inquiry into the Nature and Causes of the Wealth of Nations argues for the support of a free market economy.

  • Keynesianism: Emphasizes government spending to stimulate economic growth, often supported by Democrats.

  • Supply-Side Theory: Focuses on tax cuts to stimulate the economy, typically backed by Republicans.

  • U.S. Economy: The United States operates under a mixed economy.