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Public Policy quiz 8
| Term | Definition |
|---|---|
| unemployment currently | 3.75% |
| inflation and unemployment are often | opposites; e.g. high inflation and low unemployment |
| effects of 2008 recession | GDP dropped 6%, unemployment at 30 yr high, sales plummet |
| effects of covid 2020 pandemic | GDP dropped by 20%, unemployment, wage rates stagnant or declined |
| underemployment | when your job doesn't match your experience; e.g. college grad at starbucks |
| new deal made economic policy | central to governmental concern; fluctuations used to be considered "acts of god" |
| role of individual citizens | govs have little or no direct control over individual citizen actions |
| transformation of economy | globalized; "gig economy"; e.g. FDR's new deal sparked gov assistance |
| medicaid what type of policy | social welfare |
| economic policy and political leaders 1 | frequently makes decisions that benefit some citizens and impose burdens on others; balance inflation and unemployment |
| goals of economic policy | economic growth, full employment, stable prices, positive balance of payments, structural change |
| economic growth | warfare to welfare state, economic growth in postwar, given to citizens and gov |
| full employment | never no unemployment, importance of individualism and self-reliance, unemployed ppl don't have $ for taxes, cost gov $ |
| increased prices for goods and services | affects all citizens, higher interest rates |
| benefits of inflation | gov benefitted (more $), gov = progressive taxes benefit from inflation, ppl w/ incomes haven't seen their increased $ back |
| balance of payments | net cost of imports and income from exports |
| negative balance of payments | we import more than exports; large neg balance means heavily dependent on foreign goods |
| international flows of capital | many businesses outside US; strength of US dollar in international market; reduction in US imports |
| structural change goal: | change industrial and regional composition of production |
| structural change | fed gov less involved (exception = TN Valley authority), politically difficult for fed gov to support one area over another |
| fed gov support | active involvement in state and local govs, evident in tax incentives, increasing productivity in workforce (invest in tech) |
| fiscal - congress | monetary; federal reserve is independent |
| fiscal policy | spending and borrowing |
| budget deficit and surplus | deficit to stimulate economy, surplus to reduce inflation |
| difficulties in practice of fiscal policy | deficits and surpluses not politically neutral, citizens like to receive benefits but not pay taxes |
| making fiscal policy | most policy decisions thru budgetary process; year starts oct 1; most prezs try to balance, congress does work w/ prez credit |
| fiscal policy tool | tax cuts and increases; most tax breaks to rich (trickle down economics: assumption rich ppl will invest saved $ to jobs) |
| monetary policy | money supply and federal reserve board |
| open market operations | fed buying/selling securities issued by fed gov |
| discount rate | rates of interest at which member banks can borrow $ from fed reserve or each other to cover shortages in required reserves |
| reserve requirements | member banks required to keep certain amount of money in reserve |
| regulation and control | achievement of economic and social goals, make certain behavior more/less profitable |
| e.g. more/less profitable behavior | antitrust regulation - sherman act 1890; minimum wage increase is deterrent for hiring |
| gov support for industry | support for research dvp, subsidized credit, grants and loans |
| use of direct services and credits to attract industry | supplying transportation, building infrastructure |
| deregulation | safety and regulations of fed gov made it difficult for US to produce goods at competitive global prices |
| research and dvp | US gov could make more funds available for research |
| regional policy | gov must address human problems; efforts to make localities more attractive to industries considering relocation |
| public ownership | managerialism and privatism, state/local level public enterprises, variety of gov functions, use of loan guarantees |
| e.g. variety of gov functions | provide revenue, regulate prices, stimulate economy |
| public support for labor | productivity of labor force increase, aggressive training (mismatch between requirements of jobs and worker skills) |
| incentives | tax incentives encourage investment, incentives for structural change and industries (extensive tax credits) |
| influence thru persuasion/ moral suasion | works best during emergencies, prez central to use suasion for economic behavior, can use variety of symbols |
| paradox of healthcare | best healthcare globally and spends tons but 1/5 don't have access; preventative care = cheaper |
| gov involvement in healthcare | fed gov was major source of funds for medical research; health insurance (medicare - old ppl - and medicaid - low income) |
| problems in healthcare | quality, evaluation (poor ranking), disparities, cost, poor access to health care (rural areas) |
| quality of care | problem determining quality, malpractice suits, over/undertreatment, disparities w/ minoritized groups |
| access to medical care | gov supposed to ensure, economic barriers, geographical disparities |
| cost | rapidly risen cost; number of procedures, general increase in price for all procedures |
| factors for increased cost | physicians work w/ provider programs to negotiate lower fees, method of payment (3rd party providers), copayments |
| gov health programs | ACA, medicare, medicaid, HMOs |
| affordable care act | individual mandate (fined if no insurance), affordable, expansion of medicaid, won't exclude based on conditions; controversial |
| medicare | part of social security; hospitalization, supplementary insurance, medicare-approved plan w/ company, drug prices covered |
| medicaid | provides federal funds; states required to provide certain things; service provider fraud; disparity in eligability |
| HMOs | health management orgs; fee-for-service medicine; prepaid medical care, managed care |
| healthcare regulation: costs | controlling costs, role of fed gov in fees, quality, drugs |
| healthcare regulation: quality | controversial area of intervention, quality improvement programs, private mechanisms for rectifying harm |
| healthcare regulation: drugs | fed gov regulation of FDA, basic regulatory doctrine = safe and effective; too much input from pharmaceuticals |
| options for national health insurance | direct service delivery, lack of available alternative plans, public option in addition to private ones |
| federal reserve | central bank, 2 roles: regulate commercial banks by insuring they have reserve $; monetary policy to in/decrease money supply |
| interest rates | price of borrowing money to cover inflation and ensure profit; low interest rates cause ppl to borrow more and spend more |
| decreased money supply = | less money = higher interest rates on loans |
| liquid assets | an asset that can quickly be converted into cash and with minimal impact to the price received → not stocks, bonds, or mortgages |
| discount rate | the rate which the FED charges banks (decreasing rate = more loans = more money supply) |
| open market operations | when the FED buys or sells short term government bonds (govt. Bonds = treasury bills or IOUs) |
| quantitative easing | central banks buy up longer term assets from banks using fake money → which causes inflation |
| excess reserves | how much a bank can lend out; 90% |
| recessionary gap | a situation wherein the real GDP is lower than potential GDP at the full employment level |
| inflationary gap | the amount by which the actual gross domestic product (GDP) exceeds potential full-employment GDP |
| macroeconomics | the study of the entire economy as a whole rather than individual markets. |
| fiscal policy | the way a government adjusts its spending levels and tax rates to monitor and influence a nation's economy |
| expansionary fiscal policy | stimulates the economy during or anticipation of a business-cycle contraction |
| Contractionary fiscal policy | enacted by a government to reduce the money supply and ultimately the spending in a country |
| deficit spending | the government spends more money than it collects in tax revenue |
| crowding out | where increased public sector spending replaces, or drives down, private sector spending. |
| classical views on economy | economy will fix itself in a long run, gov intervention will lead to unintended consequences and cause massive inflation and debt |
| austerity | raising taxes and cutting gov spending to reduce debt |
| multiplier effect | the initial increase in government spending of $100 might turn out to be $175 worth of actual spending in the economy. |
| when economy is booming, multiplier is | 1x |
| when economy is in recession, multiplier is | 2x |
Created by:
lector_noche
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