2. Q1. Public policy process

3. A1. The political interactions that lead to the emergence and resolution of public policy issues.

4. Q2. A system of production and consumption of goods and services that are allocated through exchange among producers and consumers

5. A2. economy

6. Q3. A classic economic philosophy that holds that owners of business should be allowed to make their own production and distribution decisions without government regulation or control

7. A3. laissez-faire doctrine

8. Q4. A term that refers to government restrictions on the economic practices of private firms.

9. A4. regulation

10. Q5. An economic principle that holds that firms should fulfill as many of society’s needs as possible while using as few of its resources as possible. The greater the output (production) for a given input (for example, an hour of labor), the more efficient the process

11. A5. efficiency

12. Q6. Burdens that society incurs when firms fail to pay the full costs of production. An example is the pollution that results when corporations dump industrial wastes into lakes and rivers

13. A6. externalities

14. Q7. The rescinding of excessive government regulations for the purpose of improving economic efficiency

15. A7. deregulation

16. Q8. equity (in relation to economic policy)

17. A8. The situation in which the outcome of an economic transaction is fair to each party. An outcome can usually be considered fair if each party enters into a transaction freely and is not unknowingly at a disadvantage

18. Q9. A tool of economic management by which government attempts to maintain a stable economy through its taxing and spending policies

19. A9. fiscal policy

20. Q10. When the government spends more than it collects in taxes and other revenues

21. A10. deficit spending

22. Q11. A very severe and sustained economic downturn. They are very rare in the United States; the last one was in the 1930s

23. A11. economic depression

24. Q12. A moderate but sustained downturn in the economy. (Two consecutive quarters in which GDP decreases) They are part of the normal cycle of ups and downs

25. A12. economic recession

26. Q13. demand-side economics

27. A13. A form of fiscal policy that emphasizes “demand” (consumer spending). Government can use increased spending or tax cuts to place more money in consumers’ hands and thereby increase demand

28. Q14. budget deficit

29. A14. The situation when the government’s expenditures exceed its tax and other revenue

30. Q15. The total cumulative amount that the U.S. government owes to creditors

31. A15. national debt

32. Q16. Situation when the government’s tax and other revenues for the year are roughly equal to its expenditures

33. A16. balanced budget

34. Q17. budget surplus

35. A17. Situation when the government’s tax and other revenues exceed its expenditures

36. Q18. A form of fiscal policy that emphasizes “supply” (production). An example is a tax cut for business

37. A18. supply-side economics

38. Q19. capital-gains tax

39. A19. The tax that individuals pay on money gained from the sale of a capital asset, such as property or stocks

40. Q20. A general increase in the average level of prices of goods and services

41. A20. inflation

42. Q21. graduated personal income tax

43. A21. A tax on personal income in which the tax rate increases as income increases; in other words, the tax rate is higher for higher income levels

44. Q22. A tool of economic management, to available to government, based on manipulation of the amount of money in circulation; tools include the reserve requirement, discount rate, and open market operations.

45. A22. monetary policy

46. Q23. political agenda

47. A23. Issues that people believe require governmental action

48. Q24. A burden that people believe they must bear if a policy is enacted

49. A24. cost

50. Q25. A satisfaction that people believe they will enjoy if a policy is adopted

51. Q25. benefit

52. Q26. majoritarian politics

53. A26. A policy in which almost everybody benefits and almost everybody pays

54. Q27. interest group politics

55. A27. A policy in which one small group benefits and another small group pays

56. Q28. client politics

57. A28. A policy in which one small group benefits and almost everybody pays

58. Q29. entrepreneurial politics

59. A29. A policy in which almost everybody benefits and a small group pays the cost

60. Q30. policy entrepreneurs

61. A30. Activists in or out of government who pull together a political majority on behalf of unorganized interests

62. Q31. The market value of all final goods and services produced in the United States during a given year

63. A31. gross domestic product

64. Q32. The use of supply-side theory, taxes were reduced, government regulation reduced, government spending reduce (except) military, and money supply controled

65. A32. Reaganomics

66. Q33. A document that states tax collections, spending levels, and the allocation of spending among purposes

67. A33. budget

68. Q34. For the federal government, October 1 through the following September 30

69. A34. fiscal year

70. Q35. budget resolution

71. A35. A congressional decision that states the maximum amount of money the government should spend

72. Q36. sequester

73. A36. Automatic spending cuts

74. Q37. An economic system in which individuals and corporations, not government, own the principal means of production and seek profit

75. A37. capitalism

76. Q38. Negotiations between representatives of labor unions and management to determine acceptable working conditions

77. A38. collective bargaining

78. Q39. As measured by the Bureau of Labor Statistics (BLS), the proportion of the labor force actively seeking work but unable to fine jobs

79. A39. unemployment rate

80. Q40. Keynesian economic theory

81. A40. The theory emphasizing that government spending and deficits can help the economy weather its normal ups and downs. Proponents of this theory advocate using the power of government to stimulate the economy when it is lagging

82. Q41. poverty line

83. A41. As defined by the federal government, the annual cost of a thrifty food budget for an urban family of four, multiplied by three to allow also for the cost of housing, clothes, and other expenses. Families below the poverty line are considered poor and are eligible for certain forms of public assistance

84. Q42. negative government

85. A42. The philosophical belief that government governs best by staying out of people’s lives, giving individuals as much freedom as possible to determine their own pursuits

86. Q43. positive government

87. A43. The philosophical belief that government intervention is necessary in order to enhance personal liberty and security when individuals are buffeted by economic and social forces beyond their control

88. Q44. Government benefits that are given directly to individuals. These payments may be either cash transfers, such as Social Security payments and retirement payments to former government employees, or in-kind transfers, such as food stamps and low- interest loans for college education

89. A44. transfer payments

90. Q45. Any of a number of individual- benefit programs, such as social security, that require government to provide a designated benefit to any person who meets the legally defined criteria for eligibility

91. A45. entitlement programs

92. Q46. social insurance

93. A46. Social welfare programs based on the “insurance” concept, requiring that individuals pay into the program in order to be eligible to receive funds from it. An example is social security for retired people, unemployment insurance, and medicare

94. Q47. public assistance

95. A47. A term that refers to social welfare programs funded through general tax revenues and available only to the financially needy. Eligibility for such a program is established by a means test. These programs include Temporary Assistance for Needy Families (TANF), food stamps, subsidized housing, and medicaid

96. Q48. The requirement that applicants for public assistance must demonstrate that they are poor in order to be eligible for the assistance

97. A48. means test

98. Q49. A government benefit that is a cash equivalent, such as food stamps or rent vouchers. This form of benefit ensures that recipients will use public assistance in a specified way

99. A49. in-kind benefit

100. Q50. effective tax rate

101. A50. The actual percentage of a person’s income that is spent to pay taxes

102. Q51. The idea that all individuals should be given an equal chance to succeed on their own

103. A51. equality of opportunity

104. Q52. charitable choice

105. A52. Name given to four federal laws passed in the late 1990s specifying the conditions under which nonprofit religious organizations could compete to administer certain social service delivery and welfare programs

106. Q53 Major Social Welfare Programs Insurance, or “Contributory”, Programs o Old Age, Survivors, and Disability Insurance (OASDI) Monthly payments to retired or disabled people and to surviving members of their families. This program, popularly called Social Security, is paid for by a payroll tax on employers and employees. (No means test) o Medicare Federal government pays for part of the cost of medical care for retired or disabled people covered by Social Security. Paid for by payroll taxes on employees and employers. (No means test)

107. Q53 Major Social Welfare Programs Assistance, or “Noncontributory” Programs o Unemployment Insurance (UI) Weekly payments to workers who have been laid off and cannot find work. Benefits and requirements determined by states. Paid for by taxes on employers. (No means test) o Temporary Assistance for Needy Families (TANF) Payments to needy families with children. Replaced the old AFDC program. Partially paid for by block grants from the federal government to the states. (Means test) o Supplemental Security Income (SSI) Cash payments to aged, blind, or disabled people whose income is below a certain amount. Paid for from general federal revenues. (Means test) o Food Stamps Vouchers given to people whose income is below a certain level, that can be used to buy food at grocery stores. Paid for out of general federal revenues. (Means test) o Medicaid Pays medical expenses of persons receiving TANF or SSI payments (Means test) o Earned Income Tax Credit (EITC) A provision of a 1975 law that entitles working families with children to receive money from the government if their total income is below a certain level.

108. Q54. social welfare policies

109. A54. Policies that provide benefits to individuals, particularly to those in need.

110. Q55. income distribution

111. A55. The “shares” of the national income earned by various groups

112. Q56. A tax by which the government takes a greater share of the income of the rich than of the poor. The more you make, the more you pay, as a percentage of your income. Example: income tax o High income: 30 % o Middle income: 20% o Low income: 10%

113. A56. progressive tax

114. Q57. A tax by which the government takes the same share of income from everyone, rich and poor alike. Often called a flat tax. o High income: 20 % o Middle income: 20% o Low income: 20%

115. A57. proportional tax

116. Q58. A tax in which the burden falls relatively more heavily upon low- income groups than upon wealthy taxpayers. The opposite of a progressive tax, in which tax rates increase as income increases. The more you make, the less you pay, as a percentage of your income. Example: sales tax o High income: 10 % o Middle income: 20% o Low income: 30%

117. A58. regressive tax

118. Q59. Describes the view that the country should deliberately avoid a large role in world affairs and instead concentrate on domestic concerns

119. A59. isolationist

120. Q60. Describes the view that the country should involve itself deeply in world affairs

121. A60. internationalist

122. Q61. A doctrine, developed after World War II, based on assumptions that the Soviet Union was an aggressor nation and that only a determined United States could block Soviet territorial ambitions

123. A61. containment

124. Q62. The lengthy period after World War II when the United States and the Soviet Union were not engaged in actual combat (a “hot war”) but were locked in a state of deep-seated hostility

125. A62. cold war

126. Q63. A power structure dominated by two powers only, as in the case of the United States and the Soviet Union during the cold war

127. A63. bipolar (power structure)

128. Q64. A power structure dominated by a single powerful actor, as in the case of the United States after the collapse of the Soviet Union

129. A64. unipolar (power structure)

130. Q65. multilaterralism

131. A65. The situation in which nations act together in response to problems and crises

132. Q66. preemptive war doctrine

133. A66. The idea, espoused by President George W. Bush, that the United States could attack a potentially threatening nation even if the threat had not yet reached a serious and immediate level

134. Q67. The situation in which one nation takes action against another state (nation) or states (nations)

135. A67. unilateralism

136. Q68. deterrence policy

137. A68. The idea that nuclear war can be discouraged if each side in a conflict has the capacity to destroy the other with nuclear weapons

138. Q69. The three components (the military establishment, the industries that manufacture weapons, and the members of Congress from states and districts that depend heavily on the arms industry) that mutually benefit from a high level of defense spending

139. A69. military-industrial complex

140. Q70. Business firms with major operations in more than one country

141. A70. multinational corporations

142. Q71. economic globalization

143. A71. the increased interdependence of nations’ economies. The change is the result of technological, transportation, and communication advances that have enabled firms to deploy their resources around the globe

144. Q72. the view that the long-term economic interests of all countries are advanced when tariffs and other trade barriers are kept to a minimum

145. A72. free-trade position

146. Q73. The view that the immediate interests of domestic producers should have a higher priority (through, for example, protective tariffs) than should free trade between nations

147. A73. protectionism

148. Q74. worldviews

149. A74. A comprehensive opinion of how the United States should respond to world problems

150. Q75. disengagement (or Vietnam) view

151. A75. The belief that the United States was harmed by its war in Vietnam and so should avoid supposedly similar events

152. Q76. The view that we should try to improve the lives of people in other countries

153. A76. doctrine of human rights

154. Q77. gold plating

155. A77. The tendency of Pentagon officials to ask weapons contractors to meet excessively high requirements

156. Q78. environment impact statement

157. A78. A report required by federal law that assesses the possible effect of a project on the environment if the project is subsidized in whole or part by federal funds

158. Q79. command-and- control strategy

159. A79. A strategy to improve air and water quality, involving the setting of detailed pollution standards and rules

160. Q80. foreign policy

161. A80. A policy that involves choice taking, like domestic policy, but additionally involves choices about relations with the rest of the world.

162. Q81. Created in 1945, an organization whose members agree to renounce war and to respect certain human and economic freedoms. The seat of real power is the Security Council in which the United States is a permanent member.

163. A81. United Nations (UN)

164. Q82. Created in 1949, an organization whose members include the United States, Canada, most Western European nations, and Turkey, all of whom agreed to combine military forces and to treat a war against one as a war against all

165. A82. North Atlantic Treaty Organization (NATO

166. Q83. An alliance of the major Western European nations that coordinates monetary, trade, immigration, and labor policies, making its members one economic unit. An example of a regional organization

167. A83. European Union (EU)

168. Q84. A tense relationship beginning in the 1950s between the Soviet Union and the United States whereby one side’s weaponry became the other side’s goad to procure more weaponry and so on.

169. A84. arms race

170. Q85. A slow transformation from conflict thinking to cooperative thinking in foreign policy strategy and policymaking. It sought a relaxation of tensions between the superpowers, coupled with firm guarantees of mutual security

171. A85. detente

172. Q86. Mutual dependency, in which the actions of nations reverberate and affect one another’s economic lifelines

173. A86. interdependency

174. Q87. Often call “Star Wars” by the critics and the press. A plan for defense against the Soviet Union unveiled by President Reagan in 1983. It would crate a global umbrella in space, using computers to scan the skies and high- tech devices to destroy invading missiles

175. A87. Strategic Defense Initiative (SDI)