American Government Exam 4
Keynesian economics
"DEMAND-SIDE ECONOMICS" -When the economy is in recession, the assumption is that demand needs to be bolstered -believe that raising taxes in not detrimental to the economy -sees saving and investment as having a detrimental impact on the economy- wants to discourage taking money out of the system.
Supply-side economics
"REAGANOMICS" -believe that raising taxes will destroy any hope of a recovery during a recession -claim that supply-side economics pulled the US out of a recession
How did the federal government contribute to the financial collapse of 2008?
"Still it is clear that the government played an important role in helping capitalism recover formats shortcomings" Subprime mortgage industry collapsed... and the federal government had to come to the rescue
What was the average loss of value for the American homeowner?
$110,000 per homeowner
How does "the fed" expand the money supply?
-The Fed controls the money supply through reserve requirements placed on banks and selling debt -U.S. uses a fractional reserve system -Only a percentage of the money on deposit with the bank is actually backed up by cash -The difference is loaned out -Decrease the fraction of the reserve that is required to be on hand and the money supply goes up
Which member of the cabinet works most closely with the president on foreign policy?
Department of State (executive branch)
GDP full name
Gross Domestic Product
What was the "cold war" and what two basic approaches did the US take?
NATO & Warsaw Pact fighting moved out of isolationism
What does GDP measure
National economic growth
Who fought the Inspector General in properly disbursing TARP funds?
Neil Barofsky
Which political group supported the Federal Reserve System
Progressives
What was the "Reagan Doctrine"?
Reagan returned to providing military assistance to opponents of communism
What is the purpose of the federal reserve system?
The Federal Reserve Bank system was created to control the money supply and encourage low unemployment rates
What is the Monroe Doctrine
The U.S. would not permit further colonization of the western hemisphere by European Powers
Gross Domestic Product:
The value of all the goods and services produced in a country is called
What role did private businesses play in the financial collapse of 2008?
They were pressured by the U.S. government to follow the policies of the government.
What is the full name for TARP?
Troubled Asset Relief Program
Which administration ultimately chose to bail out the investment bankers at the end of the real estate meltdown?
Troubled Asset Relief Program
Who were the Warsaw Pact nations
USSR & Eastern Europe
What did the Bretton Woods System (or agreement) allow?
created International Monertaty Fund
Marshall Plan
help rebuild Europe
Truman Doctrine
military and economic aid to nations that were resisting communist aggression
What is the Roosevelt Corollary?
the US would assure stability in Latin America "justified" american intervention in affairs of Latin American nations
defense policy
the policy that a nation follows in defending itself against its enemies
foreign policy
the policy that a nation follows in developing and maintaining its relationships with other nations