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AP Gov Chapter 18

Chapter 18 Vocabulary Terms

Business Cycles Fluctuation between expansion and recession that are a part of modern capitalist economics.
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 government involvement in the economy is wrong.
Interventionist State Alternative to the laissez-faire state; the government take an active role in guiding and managing the private
Economic Regulation Government regulation of business practices, industry rates, routes, or areas serviced by particular industries.
Social Regulation Government regulation of the quality and safety of products as well as the conditions under which goods and services are produced.
Deregulation A reduction in market controls (such as price fixing, subsidies, or controls on who can enter the field) in favor of market-based competition
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.


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