Unit Five: Policy Making

Directions: Students are required to define these words and maintain them in the correct location in their
notebook. All vocabulary words will be collected with the notebook and count towards a homework grade. Definitions should be comprehensive, so that the student may study them to prepare for the vocabulary quiz at the end of the unit. Abstract: In this unit students will analyze, and evaluate the policy making process. Students will determine the relationship between policy making and regulatory agencies, economic performance, and international alliances. Focus Questions: How does the government influence the economy? What is the role of Congress in developing public policy? What is the impact of regulatory agencies in developing and enforcing policy? What is the role of the President in developing and enforcing policy? How do demographic changes influence government policies? What are the economic, political, and social effects of American foreign and domestic policies? What is the impact of the Federal Reserve System on the United States economy and monetary policy? What is the difference between fiscal and monetary policy?

Focus ?s Due: May 1, 2008 Quiz May 1, 2008

TERMS

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Ambassador - An official of the government who represents the nation in diplomatic matters Business Cycle - A sequence of economic activity typically characterized by recession, fiscal recovery, growth, and fiscal decline 3. Consumer Price Index (CPI) - A measure of the overall price level in the economy 4. Consumer Sovereignty - Those with money and other assets are able to use their purchasing power to tell producers of goods and services what to produce (and how much) 5. Consumption - The use of resources, goods, and services to satisfy economic wants 6. Demand -The different quantities of a resource, good, or service that will be purchased at various possible prices at a given point in time; Demand is generally presented as a schedule of prices and quantities. It can also be represented graphically as a demand curve 7. Depression - A period of low economic activity and widespread unemployment 8. Discount (interest) rate - The interest rate the Federal Reserve System charges member banks for overnight loans 9. Domestic policy - Policies related to a countrys internal affairs 10. Economic growth -Growth that occurs when increasing amounts of goods and services are produced over the long term; generally measured as GDP (gross domestic product) or GDP per capita and reported on quarterly and annually. Economic growth is a goal for which economies strive in order to improve the material standard of living of the society 11. Economic sanction -Economic penalties applied by one country or group of countries on another for economic, political or other reasons. Economic sanctions can include tariffs, duties, quotas, embargoes, and other monetarily damaging penalties 12. Economic wants -Human needs and desires than can be satisfied by consuming goods and services, including but not limited to such needs as hunger, thirst, protection from the elements, and good health and such desires as entertainment and a pleasing physical appearance; sometimes described as survival wants and luxury wants 13. Embargo - An order prohibiting trade with another country 14. Entitlement Programs - Government programs designed to help elderly, ill and unemployed citizens. 15. Equity - Most commonly thought of as "justice", however equity developed as a separate body of law in England in reaction to the inability of the common law courts to provide a remedy for every injury

16. Executive agreement - A pact made by the President directly with the head of a foreign state; a
binding international agreement with the force of law but which (unlike a treaty) does not require Senate consent 17. Expenditure - The act or process of paying out 18. Federal Budget - The revenue and appropriations of the government 19. Fiscal Policy -A course of action that seeks to achieve socioeconomic goals by affecting the level of taxes and governmental expenditures in the economy. In the U.S., fiscal policy is largely the responsibility of the President and the U.S. Congress and on the state level, the Governor and the General Assembly 20. Foreign Aid - Economic, military, technical, and financial assistance given on an international, and usually intergovernmental level 21. Foreign Policy - Politics of the federal government directed to matters beyond United States borders, especially relations with other countries 22. Foreign Policy Goals - World Peace, Aid to Democratic Governments, Free/Open Trade, National Security, Concern for Humanity 23. Goods - Physically tangible objects that can be used to satisfy economic wants, including but not limited to food, shoes, cars, houses, books, and furniture 24. Gross Domestic Product (GDP) - The total dollar value of all final goods and services produced within a country's borders in a given time period 25. Inflation - An increase in the overall price level in an economy 26. Interest Rates - The interest rate the Federal Reserve System charges member banks for overnight loans 27. Internationalism/Interventionism - the doctrine that nations should cooperate because their common interests are more important than their differences 28. Isolationism - The views that the United States should withdraw from world affairs, limit foreign aid, and avoid involvement in foreign wars 29. Medicaid - A social program that gives the states money to help those who cannot afford to pay for their hospital bills 30. Medicare - A social program that helps pay for medical care for the elderly 31. Monetary policy -A course of action that seeks to affect the amount of money and credit available in the economy and the cost of the credit (interest rates) in order to help the economy grow, keep prices stable, and keep employment at a high level. In the United States, monetary price is the responsibility of the Federal Reserve System; tools of monetary policy include open market operations, adjustments in reserve requirement ratios held on deposits and changes in the primary credit rate (discount rate) charged to financial institutions by the Federal Reserve Banks 32. National sovereignty - Supremacy of authority or rule as exercised by a sovereign or sovereign state 33. Natural resources -The renewable and nonrenewable gifts of nature that can be used to produce goods and services, including but not limited to land, water, animals, minerals, trees, climate, soil, fire, seeds, grain, and fruits 34. Open Market Operations - The means the Federal Reserve System uses to affect the economy by buying or selling government securities on the open market 35. Opportunity costs -The foregone benefit of the next best alternative when an economic decision is made. If the class chooses to go to the library work on their computer skills instead of having recess, then opportunity cost of the choice is having recess 36. Price Stability - Zero or very low positive inflation 37. Production - The act of creating goods and services by combining economic resources 38. Productivity - The amount of output that is produced per unit of input; usually expressed in terms of output per unit of time 39. Profit - The difference between the amount of money used to operate a business and the amount of money the business takes in 40. Progressive Income Tax - Or graduated tax, is a tax that is larger as a percentage of income for those with larger incomes 41. Recession - A slowdown in economic activity for at least two consecutive quarters (6 months) 42. Recovery (economic) - Increased economic activity during a business cycle, resulting in growth in the gross domestic product 43. Regulatory Agency -Governmental jurisdictions or departments that issue laws, ordinances, and other regulations that design and construction must comply with, such as the administrative units, Federal

Communications Commission and the Environmental Protection Agency, that have responsibility for monitoring and regulating ongoing economic activities 44. Revenue - The total income of a business or a unit of government 45. Scarcity - The condition that results from unlimited economic wants and the limited resources, goods, and services available to satisfy those wants 46. Socio-economic goals -Broad social goals that relate to economics and guide individuals and society in making decisions; social economic goals will vary in priority from one country to another and from one time period to another, depending on the nature of the political, social, and economic goals of the society and the political, social, and economic conditions which exist at the time. For additional information, see the section at the end of the glossary that describes the goals in more detail 47. Socio-economic status - A familys place in society based on a family's income, parental education level, parental occupation, and social status in the community 48. Standard of Living - The quantity of goods and services, such as health care, clean water, education, houses, apartments, telephones, food, clothing, paved roads, and computers available in an economy 49. Supply-The different quantities of a resource, good or service that will be offered for sale at various possible prices during a specific time period; supply is generally presented as schedule of prices and quantities; it can also be represented graphically as a supply curve. See laws of supply and demand 50. Tariff - A list or system of duties imposed by a government on imported or exported goods 51. Tax - Mandatory payment to the government; Examples: income, sales, estate, etc 52. Tax cuts - A reduction in the amount of money collected annually by the government 53. Trade - To engage in the exchange, purchase or sale of resources, goods or services ORGANIZATIONS, AGENCIES, and DEPARTMENTS

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Americorps - A network of national service programs that engage Americans each year in intensive service to meet critical needs in education, public safety, health and the environment 2. Center for Disease Control (CDC) -United States Agency for protecting the public health and safety of people by providing credible information to enhance health decisions, and promoting health through strong partnerships with state health departments and other organizations 3. Environmental Protection Agency (EPA) - An independent federal agency established to coordinate programs aimed at reducing pollution and protecting the environment 4. Federal Aviation Agency (FAA) - An agency in the Department of Transportation that is responsible for the safety of civilian aviation 5. Federal Communications Commission (FCC) - An independent government agency that regulates interstate and international communications by radio and television and wire and cable and satellite 6. Federal Reserve System - The nation's central bank 7. Federal Trade Commission (FTC) - An independent agency of the United States federal government that maintains fair and free competition; enforces federal antitrust laws; educates the public about identity theft 8. Food and Drug Administration (FDA) - A federal agency in the Department of Health and Human Services established to regulate the release of new foods and health-related products 9. International Monetary Fund (IMF) -This is an international organization of 184 countries established to promote monetary cooperation and exchange stability. The organization also fosters economic growth and high levels of employment and provides temporary financial assistance 10. International Red Cross/Red Crescent -The world's largest humanitarian organization, with 185 member National Societies. Our activities, which are funded by appeals, focus on health, disaster management, and promoting humanitarian principles and values 11. North American Free Trade Agreement (NAFTA) - An agreement that removed trade restrictions among the U.S., Canada, and Mexico to increase free cross-border trade 12. Peace Corp -A federal government organization, set up in 1961, that trains and sends American volunteers abroad to work with people of developing countries on projects for technological, agricultural, and educational improvement 13. United Nations (UN) - In 1945 one of Trumans first presidential decisions was to form an international organization hoping to settle disputes between nations and prevent any future wars 14. World Bank - A specialization of the United Nations. It is one of the world's largest sources of development assistance with a primary focus on helping the poorest people and the poorest countries

DO NOT USE THIS SHEET FOR YOUR DEFINITIONS - USE YOUR OWN
#) WORD definition Example: 1) VOCABULARY - A list of words and often phrases, usually arranged alphabetically and defined or translated Resources: Chapters 20, 21, 22 25, 26