Making Economic and
Government policy that attempts to manage
the economy by controlling taxing and
Government policy that attempts to manage
the economy be controlling the money
supply and interest rates.
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.
Consumer tax on a specific kind of
merchandise, such as tobacco.
A tax graduated so that people with higher
income pay a larger fraction of their income
than people with lower income.
A tax whereby people with lower income
pay a higher fraction of their income than
people with higher incomes.
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.
The accumulation total of federal deficits,
minus surpluses, over the years.
Gross Domestic Product (GDP)
An estimate of the total output of all
economic activity in the nation, including
goods and services.
Government programs such as Social
Security , Medicare, and unemployment
insurance to which qualified citizens
are”entitled” by national legislation.
Office of Management Budget
Presidential staff agency that serves as a
clearinghouse for budgetary requests and
Congressional Budget Office
An agency of Congress that analyzes
presidential budget recommendations and
estimates the costs of proposed legislation.
A resolution passed in the same form by
both houses of Congress that expresses the
“sense” of Congress on some question. It is
not sent to the president and does not have
the force of law.
Process by which Congress sets ceilings on
what Appropriations Subcommittees can
General Accounting Office
An independent investigative arm of
Congress established in 1921 to check on
receipt and disbursement of public funds
and review the performance of government
Head of the General Accounting Office,
appointed by the president with the
approval of the Senate for a 15-year term.
General tax on sales transaction, 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 the sale.
Loss of tax revenue due to federal tax laws
that provide special tax incentives or
benefits to individuals or businesses.
A measure passed by Congress in 1996 and
ruled unconstitutional by the Supreme Court
in 1998 whereby the president was given
the authority to strike specific spending
programs from the budget passed by
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 is comprised of 12
regional banks, and its major
responsibilities are supervised by the
Federal Reserve Board of Governors.
Economic theory that opposes
governmental interference in the economy
beyond what is necessary to protect life and
Economic theory based on the principles of
John Maynard Keynes stating tat
government spending should increase
during business slumps and be curbed
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.
An imbalance in international trade in
which the value of imports exceeds the
value of exports.
In trade context, a limit on the quantity of of
a particular product that may be imported.
General Agreement on Tariffs
and Trade (GATT)
An international trade organization with 125
members, including the United States , that
seeks to encourage free trade by lowering
tariffs and other trade restrictions.
North American Free Trade
Agreement signed by the United States,
Canada, and Mexico in 1992 to form the
largest free-trade zone in the world.
Policy of erecting trade barriers to protect
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.
Independent Regulatory Agency
A government agency that exists outside the
three branches of government and is
responsible for enforcing particular statues.
Domination of an industry by a single
company; also the company that dominates.
Federal laws and regulations that try to
prevent businesses from dominating
particular market through monopoly or
restraint of trade.
A monopoly that controls goods and
services, often in combinations that reduce
A corporation in which an officer of
director sits on the board of a competitor,
with the effect of restraining trade.
Contract by an anti-union employer that
forces new workers to promise they will not
join a union as a condition of employment.
A company with a labor agreement whereby
union membership is a condition of
A company in which new employees must
join a union within a stated time period.
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 community.
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 or development on the
A Policy promoting cutbacks in the amount
of federal regulation in specific areas of