Chapter 16

Benefits of the pursuit of free trade policy by the United States after World War II.

After World War II, the United States and its partners increasingly moved toward a free trade policy, which aims at lowering or eliminating tariffs and non-tariff barriers to trade. Free trade policies decrease the costs of bringing products to markets throughout the world, and open markets to greater product diversity and brisker competition. This allows American companies to participate in the global marketplace at a lower cost, leading to an increase in goods production and the size of the national economy.

Continuing resolutions

Continuing resolutions occur when the president and Congress fail to approve one of more of the twelve appropriation bills that fund the government for the upcoming fiscal year. Continuing resolutions must be approved by Congress by October 1 of each year or else the government will shut down, as it did for 16 days in October of 2013. They grant authorization to federal agencies not covered by approved appropriations laws to continue to spend money within their previous budget year's levels.

Key features of Keynesian economic theory.

During the Depression, economist John Maynard Keynes developed a new theory of government fiscal policy based on deficit spending. Keynesian economics recommends that during a recession and other economic downturns, the government should increase its spending to create jobs, and decrease taxes to encourage more consumer spending. It advocates using fiscal policy, the combination of tax policy and spending policy, to ensure a healthy economy.

Features of business regulation and social regulation in the U.S. economy today.

In today's economy, the government regulates marketplace practices to protect the public. This regulation occurs in two broad categories: business regulation and social regulation. Business regulation includes government policies that aim to preserve marketplace competition. Social regulation refers to government policies directed at protecting workers, consumers, and the environment from harm caused by marketplace competition.

The factors necessary for people to live the American dream today.

Many factors make up the ability to live the American dream, starting with money. For most individuals, the ability to earn enough money to attain and sustain the American dream lifestyle is the product of several factors, including their education level, work ethic, and the availability of well-paying jobs. This last circumstance is directly tied to the overall health of the national economy.

The theories of monetarism and monetarists' ideal level of inflation.

Monetarism, a theory developed by economist Milton Friedman, advocates that the government's proper role in promoting a healthy economy is the regulation of the money supply to ensure low inflation rates. Monetarists target an inflation rate of between 1-3 percent per year to ensure an adequate money supply for a healthy economy.

Difference between a pure capitalist economy and a regulated capitalist economy.

Several differences exist between a pure capitalist economy and a regulated capitalist economy, like that of the United States. In a pure capitalist economy, private individuals and companies own the modes of producing goods and services, and the government enacts no laws aimed at marketplace regulation. In contrast, a regulated capitalist economy includes many national policies enacted to influence the economy and mandate certain business practices.

The main features and arguments of supply-side economics.

Supply-side economics was popularized by President Ronald Reagan. Supporters advocate tax cuts and a decrease in government regulation to stimulate the economy in times of recession. They argue that high taxes drain people's ability to save and corporations' ability to invest in productivity improvements. Supply-siders also argue that deregulation will contribute to increased production at the same cost, thus increasing the supply of goods. These policies were initially continued by George H. W. Bush, but were broken off in an attempt to address the growing national debt.

The CPI and what is it used for by the national government.

The CPI is the consumer price index. The Bureau of Labor Statistics publishes the CPI, which measures the average changes in prices over time of a "market basket" of goods and services, including food, clothing, shelter, fuel, transportation costs, and selected medical costs. The CPI is the most commonly used method of measuring inflation's impact.

Two forms of discretionary spending programs.

There are two types of discretionary programs: defense programs and non-defense programs. Defense programs, which take up a larger part of the budget, include expenditures for the Department of Defense, Homeland Security, and international affairs. Non-defense expenditures include justice, agriculture, energy, environment, education, justice, health, housing, income security, and transportation.