| A | B |
|---|
| Fiscal policy | Government policy that attempts to manage the economy by controlling taxing and spending. |
| Monetary policy | Government policy that attempts to manage the economy by controlling the money supply and thus interest rates. |
| Inflation | A rise in the general price level (and decrease in dollar value) owing to an increase in the volume of money and credit in relation to available goods. |
| Tariff | 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. |
| Excise tax | consumer tax on a specific kind of merchandise, such as tobacco. |
| Progressive tax | a tax graduated so that people with higher incomes pay a larger fraction of their income than people with lower incomes. |
| Regressive tax | a tax whereby people with lower incomes pay a higher fraction of their income than people with higher incomes. |
| Deficit | the difference between the revenues raised annually from sources of income other than borrowing and the expenditures of government, including paying the interest on past borrowing. |
| Debt | the accumulated total of federal deficits, minus surpluses, over the years. |
| Gross domestic product (GDP) | the total output of all economic activity in the nation, including goods and services. |
| Entitlements | Government programs, such as unemployment insurance, disaster relief, and disability payments, that provide benefits to all eligible citizens. |
| Office of Management and Budget (OMB) | Presidential staff agency that serves as a clearinghouse for budgetary requests and management improvements for government agencies. |
| Congressional Budget Office (CBO) | An agency of Congress that analyzes presidential budget recommendations and estimates the costs of proposed legislation. |
| Sales tax | General tax on sales transactions, sometimes exempting food and drugs. |
| 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. |
| Tax expenditure | loss of tax revenue due to federal laws that provide special tax incentives or benefits to individuals or businesses. |
| Monetarism | a theory that government should control the money supply to encourage economic growth and restrain inflations. |
| Federal Reserve System | the system created by Congress in 1913 to establish banking practices and regulate currency in circulation and the amount if credit available. It consists of 12 regional banks supervised by the Board of Governors. Often called simple the Fed. |
| Laissez-faire economics | theory that opposes governmental interference in economic affairs beyond what is necessary to protect life and property. |
| Keynesian economics | 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) | International trade organization derived from the General Agreement on Tariffs and Trade (GATT) that promotes free trade around the world. |
| General Agreement of Tariffs and Trade (GATT) | An international trade organization with more than 130 members, including the United States and the People’s Republic of China, that seeks to encourage free trade by lowering tariffs and other trade restrictions. |
| North American Free Trade Agreement (NAFTA) | Agreement signed by the United States, Canada, and Mexico in 1992 to form the largest free trade zone in the world. |
| Protectionism | Policy of erecting trade barriers to protect domestic industry. |
| Regulation | The attempt by government to control the behavior of corporations, other governments, or citizens through altering the natural workings of the open market to achieve some desired goal. |
| Monopoly | Domination of an industry by a single company; also the company that dominates the industry. |
| Antitrust legislation | federal laws (starting with the Sherman Act of 1890) that try to prevent a monopoly from dominating an industry and restraining trade. |
| Trust | A monopoly that controls good and services, often in combinations that reduce competition. |
| Yellow-dog contract | Contract by an anti-union employer that forces new workers to promise they will not join a union as a condition of employment. |
| Closed shop | A company with a labor agreement under which union membership is a condition of employment. |
| Open shop | A company in with new employees must join a union within a stated time period. |
| Labor injunction | A court order forbidding specific individuals or groups from performing certain acts (such as striking) that they court considers harmful to the rights and property of an employer or a community. |
| Collective bargaining | Method whereby representatives of the union and employer determine wages, hours, and other conditions of employment through direct negotiation. |
| 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 of development on the environment. |
| Deregulation | A policy promoting cutbacks in the amount of federal regulation in specific areas of economic activity. |
