Govt: Chapter 16

Labor Injunction

A court order forbidding specific individuals or groups from performing certain acts (such as striking) that the court considers harmful to the rights and property of an employer or a community.

Sales Tax

A general tax on sales transactions, sometimes exempting such items as food and drugs.

Tax Expenditure

A loss of tax revenue due to federal laws that provide special tax incentives or benefits to individuals to businesses.

Collective Bargaining

A method whereby representatives of the union and employer determine wages, hours, and other conditions of employment through direct negotiation.

Trust

A monopoly that controls goods and services, often in combinations that reduce competition.

Protectionism

A policy of erecting trade barriers to protect domestic industry.

Deregulation

A policy promoting cutbacks in the amount of federal regulation in specific areas of economic activity.

Inflation

A rise in the general price level (and decrease in the dollar value) owing to an increase in the volume of money and credit in relation to available goods.

Environmental Impact Statement

A statement required by federal law from all agencies for any project using federal funds to assess the potential effect of the new construction or development on the environment.

Progressive Tax

A tax graduated so that people with higher incomes pay a larger fraction of their income than people with lower incomes. A progressive tax is proportionate to income. As a taxpayer's income increases, so does the tax rate.

Tariff

A tax levied on imports to help protect a nation's industries, labor, or farmers from foreign competition. It can also be used to raise additional revenue.

Value-Added Tax (VAT)

A tax on increased value of a product at each stage of production and distribution rather than just at the point of sale.

Regressive Tax

A tax whereby people with lower incomes pay a higher fraction of their income than people with higher incomes. A regressive tax is levied at a flat rate without regard to the level of a taxpayer's income or ability to pay. As a result, poor citizens pay a higher percentage of their income compared with wealthier citizens.

Laissez-Faire Economics

A theory that opposes governmental interference in economic affairs beyond what is necessary to protect life and property.

Monopoly

Domination of an industry by a single company; also the company that dominates the industry.

Corporate Social Responsibility

Efforts by corporations to improve their reputations by paying attention to their contributions to the social good.

Unemployment

The number of Americans who are out of work but actively looking for a job. That number does not usually include those who have given up searching for a job.

Office of Management and Budget (OMB)

The presidential staff agency that serves as a clearinghouse for budgetary requests and management improvements for government agencies.

Excise Tax

A consumer tax on a specific type of merchandise, such as tobacco.

Union Shop

A company in which new employees must join a union within a stated time period.

Closed Shop

A company with a labor agreement under which union membership is a condition of employment.

Congressional Budget Office (CBO)

An agency of Congress that analyzes presidential budget recommendations and estimates the costs of proposed legislation.

North American Free Trade Agreement (NAFTA)

An agreement signed by the United States, Canada, and Mexico in 1992 to form the largest free trade zone in the world.

Keynesian Economics

An economic theory based on the principles of John Maynard Keynes stating that government spending should increase during business slumps and be curbed during booms.

Trade Deficit

An imbalance in international trade in which the value of imports exceeds the value of exports.

World Trade Organization (WTO)

An international organization with more than 130 members that seeks to encourage free trade by setting rules for fair competition.

General Agreement on Tariffs and Trade (GATT)

An international trade agreement that seeks to lower the barriers to free trade.

Antitrust Legislation

Federal laws (starting with the Sherman Antitrust Act of 1890) that try to prevent a monopoly from dominating an industry and restraining trade.

Fiscal Policy

Government policy that attempts to manage the economy by controlling taxing and spending, which affect inflation through lower taxes and less government spending, and unemployment through more government spending. Fiscal policy is controlled by the executive and legislative branches. The president proposes the federal budget and Congress passes it. Fiscal policy includes raising and lowering of taxes and government spending programs.

Monetary Policy

Government policy that attempts to manage the economy by controlling the amount of money in circulation through interest rates. Monetary policy is controlled by the Federal Reserve Board. Monetary policy includes regulating the money supply, controlling inflation, and adjusting interest rates.

Mandatory Spending

Required spending under the Federal budget.

Discretionary Spending

Spending that can be altered by congressional and presidential action. Discretionary spending programs are not required by law. Defense, education, agriculture, highways, research grants, and government operations are all examples of discretionary programs.

Income Inequality

The amount of after - tax income that the richest individuals and families control when compared to the amounts that the poorest control; often measured by growth in the gap between the two classes.

Federal Funds Rate

The amount of interest banks charge for loans to each other.

Budget Deficit

The condition that exists when the Federal government raises less revenue than it spends.

Compliance Costs

The cost of meeting regulatory reporting requirements.

Federal Reserve System

The system created by Congress in 1913 to establish banking practices and regulate currency in circulation and the amount of credit available. It consists of 12 regional banks supervised by the Board of Governors. Often simply called "the Fed."

Wealth

The total amount of economic assets such as income, property, and investments that individuals and families control.

National Debt

The total amount of money the Federal government has borrowed to finance deficit spending throughout the years.

Gross Domestic Product (GDP)

The value of all goods and services produced by an economy during a specific period of time such as a year.