Chapter 14: Public Policy and Economics

decisions a government makes that affect the production, distribution, and consumption of goods: the provision of goods: the flow of income: and the accumulation of wealth.

french for “leave things alone” and the view in economics that government should not interfere in the workings of the economy.

the view in economics that economics decisions making should be completely under the control of political authority.

a minor and relatively short period of economic decline

a period of serious and sustained economic decline

opposite of free trade, belief that government should protect American business and industry by restricting the flow of foreign goods into the United States

belief that America’s economic interests are best served by allowing foreign producers to sell their goods without restriction in the United States

establishment, by American corporations, of factories and offices in foreign countries to take advantage of cheap labor workers

governmental decisions about taxing and spending that affect the economic life of a nation

governmental decisions about how much money should circulate in the economy and what the cost of borrowing money, the interest rate, should be

an agency in the Executive Office of the President that provides the president with budgetary information and advice and is responsible for compiling the president;s annual budget proposal to Congress.

an excess of government expenditures over revenues

the total amount of national government owes to lenders, such as banks, individual and foreign investors, insurance companies, and the variety of financial institutions that purchase government securities.

an excess of government revenues over government expenditures

charges that the government must pay to the public for the use of money borrowed to cover budget deficits and added to the interest paid to the government trust funds to create total interest costs

a model of decision making that holds that new polices differ only marginally from existing policies

governmental programs, such as Social Security expenditures, in which spending automatically increases from one year to the next without specific annual appropriations action by Congress

programs, such as Social Security and Medicaid, whereby eligible individuals receive benefits according to law

the budget and accounting purposes in the national government, the twelve-month period beginning on October 1 and ending on September 30 of the following calendar year

congressional enactment that creates of continues a policy program and the agency administering it

congressional enactment that funds an authorized program with a specific sum of money

most state governors have the power, through which a chief executive, reacting to a bill passed by the legislature, may accept some items in the bill while also rejecting other items in the same bill, The president doesn’t not have this power.

a proposal for a constitutional amendment that would require the federal government to operate with a budget in which revenues equaled or exceeded expenditures

legislative action taken by congress to allow spending to proceed at the previous year’s level when congress has not met the deadline for reaching agreement on appropriations for the next fiscal year