ISS Unit 3
Terms
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- Economics
- Social Science involving production, distribution and consumption of goods and services
- Macroeconomics
- Overall aspect of national economy, income, output, and interrelationship
- Microeconomics
- National economy, individual firms, households, and consumers
- Central problem of economic society
- Scarcity
- Puritan Work Ethic
- Work, Thrift, Savings
- Command Economy
- Systems using totalitarian political methods as well as state-directed economies
- Market Economy
- A system in which individuals own land, housing, otherwise known as the means of production
- Major assumptions of capitalist philosophy
- Needs were primarily individual, not communal.
- Consumer soverignty
- The ability of buyers to cast their vote in dollars
- Division of labor
- Workers producing only small parts of finished good
- The "market"
- Structured environment in which buyers and sellers bid freely amongst themselves to determine wages, rent, and profits
- Who determines resource allocation?
- Buyers and sellers
- Who determines what is produced?
- Buyers and sellers
- Who determines prices?
- Buyers and sellers
- What are the factors of production
- Land, Labor, and Capital
- What is laissez-faire?
- Hands off government in the market
- What role does competition play in a capitalist economy?
- Provides for the most efficient use of resources
- Monopoly
- Control by one group of the means of producing or selling a good or service
- Oligopoly
- Control by a few groups of the means of producing or selling a good or service
- Conglomerate
- A merger between distinctly different corporations
- What impact did the Industrial Revolution have on capitalism?
- Mechanization, assembly line, efficiency
- Gilded Age
- Civil war to WWII
- Why is it said that early American labor unions lived in a hostile environment?
- Industry was against labor unions
- rugged individualism
- What halted the growth of labor unions
- Knights of Labor
- First successful labor union
- Great Sitdown Strike in Flint
- Dec. 30 1936-Feb 11, 1937, 112,000/150,000 workers came to work and sat down everyday at Fisher Body No. 2
- CIO compared to AFL
- Considered more radical
- National Labor Relations Board
- Prevent interference with the right of labor
- Fair Labor Standards Act
- Established minimum wage and maiximum hours
- First minimum wage
- 25 cents an hour
- Wagner Act
- Gave workers the right to self-organize
- Walsh-Healy Act
- Congress established 40 hour work week
- Taft-Hartley Act
- Prevented unfair practices by labor unions
- Labor's basic goals today
- Higher wages, shorter hours, and better working conditions, fringe benefits, job securtity
- Percent of workers in unions
- 11%
- Why do unions have less power now
- less members
- How did government regulate economy before New Deal?
- Maintaining conditions in which free enterprise can operate
- Why were Americans so optomistic during summer of '29?
- Industrial production had risen 50% over the past decade, profits were high, increased wages
- Causes of Great Depression
- World food prices declined, slump in the construction industry, misdistribution of income
- How did Hoover and Roosevelt differ in the 1932 campaign on economic policy?
- Roosevelt attacked Hoover’s Deficit Spending and promised to balance the budget
- Legacy of Great Depression
- Made a lasting imprint on the lives of millions of Americans. Challenged the traditional view that those who failed in the economic race only had themselves to blame
- How did FRR deal with the banking crisis?
- Emergency Banking Relief Act Agriculture? Agricultural Adjustment Act.
- How did FDR deal with agriculture?
- Agricultural Adjustment Act
- How did FDR deal with unemployment?
- PWA, WPA, CCC
- National unemployment rate during Great Depression?
- 25%
- ⬢ What were some of the main problems facing President Truman during the immediate post World War II period?
- Inflation
- • What wartime controls gave the U.S. economy some of the characteristics of a “command economy†during the war?
- Meat and Gasoline rationing
- What is inflation?
- Increase in price on a good or service
- Demand-pull inflation
- Increased inflation due to increasae in consumer demand
- Cost-push inflation
- Increased production costs, as from higher wages, drives up prices
- ⬢ Why did the Republicans win control of both houses of Congress in 1946 and why was New York Gov. Thomas E. Dewey, their presidential nominee, heavily favored in 1948?
- Strikes, Truman won labor support after vetoing Taft-Hartley
- Provisions of Taft-Hartley
- REstore balance to labor-management relations
- Closed Shop
- Only union members could be hired
- Union Shop
- Need not be a member to join, but had to within a timeframe
- Open Shop
- Union member is voluntary
- Section 14-B of Taft-Hartley
- Outlawed closed shops and union shops
- Youngstown Sheet and Tube vs Sawyer
- President exceeded his authority and ordered mills to private ownership
- Philosophy behind Employment Act of 1946
- Have full employment
- Full employment
- 4% or less
- Structural unemployment
- Long-running, serious problem, results when demand for a particular projuct is low in relation to its supply
- Cyclical unemployment
- Cause by fluctuations in the business cycle, decline from a demand in goods and services, when above 4%
- Frictional unemployment
- Short run, normal, workers voluntarily leave one job in search for another
- ⬢When does the U.S. government consider a person to be unemployed
- Someone who is actively seeking a job but is unable to find it
- ⬢What segments of the U.S. labor force are most likely to be unemployed?
- Teens and blacks
- ⬢What are some of the government programs devised to get people off the unemployment list?
- Humphrey-Hawkins Full Employment and Balanced Growth Act
- •What was President Eisenhower’s basic economic philosophy?
- Security with solvency
- ⬢What was his attitude toward business leaders?
- Admired them
- ⬢Why did Eisenhower engage in so many veto battles with congressional Democrats?
- The all republican congress was turned over to the democrats in 1958
- ⬢What did Eisenhower think of Keynesian economics, specifically deficit finance
- He wanted to lead America away from deficit spending
- ⬢ How did the Eisenhower Administration respond to the three mild recessions that occurred between 1953-1960?
- Tax cuts
- •What role did the slump of 1960 play in the outcome of that year’s presidential election?
- Helped JFK win over Nixon
- Landrum-Griffin Act
- Contains “internal democracyâ€, requires detailed financial reports by unions
- JFK's top economic priority
- Recession
- What was the “New Economics?
- Assumes the US economy has an ever rising potential, Heller, Actual and Potential GDP
- How did JFK and LBJ fight inflation
- Tax cut
- Jawboning
- Trying to persuade others using the high office
- Wage-price guidelines
- Tied wage prices to producitivity for balance
- Why was a tax cut for business at the top of Kennedy’s agenda?
- Investment for the future
- Gross National Product
- The total market value of all the goods and services produced by a nation during a specified period
- What is the meaning of the concept of “Potential Gross National Product?â€
- What we could produce in a full employment economy
- What is Gross Domestic Product?
- The total market value of all the goods and services produced within US borders during a specified period
- How does the U.S. government define poverty?
- Family of four below $19,350, individually- 9570.
- How did the Vietnam War influence Johnson’s domestic priorities?
- U.S. can't have both guns and butter
- Why did LBJ agree to a 10% tax income tax surcharge in 1968?
- Pushed hard on the idea of the “Great Society†needed lots of money to have both guns and butter.
- What were some of the key provisions of the Economic Opportunity Act?
- Created coordinated spending of other federal agencies that were directed towards a specific group of poor people
- What was the Job Corps?
- Youths from bad home situations were offered remedial education, as well as vocational training
- What was “Operation Headstart?â€
- Pre-school children received early education before becoming disabled by a bad home life.
- The Neighborhood Youth Corps
- to help unemployed teen dropouts by giving them jobs after school and during vacations. Keep teens off the streets
- • What are some examples of the ‘entitlement†programs enacted as part of Johnson’s Great Society?
- Medicare and Medicaid
- Entitlement
- When someone qualifies for something by meeting specific standards
- Staglfation
- Combination of a stagnant economy and inflation.
- Nixon's biggest economic problem
- Inflation
- How did Nixon fight inflation
- Monetary Fiscally--tax cuts
- Rate of inflation when Nixon took office
- 6%
- Why did Nixon resort to Federal controls over economy
- Stocks slumped, GNP declined
- Why don't wage and price controls work?
- Halts competition
- Nixonomics
- All things that should go up (stock market, corporate profits, real spend able income) go down and unemployment, prices, and interest rates go up
- Rate of inflation when Ford took office
- 20%
- WIN program
- Whip Inflation Now...it sucked
- Consumer Price Index
- The basic measure of price increases in goods and services
- Hyperinflation
- Extrememly high and rapid inflation
- Greenspan Commission
- Commission headed by Alan Greenspan to overview the Social Security problem
- Greenspan's recommendations
- Raise the age to receive SS to 67, federal and non-profit employees made SS universal
- ⬢ What are some of the problems that it could face in the future when the labor force will shrink in relation to the number of retired workers?
- There will be more people receiving SS than putting money into the system
- Present Social Security tax rate
- 6.2%
- OASI
- Old age and survivor insurance
- Medicare
- SS program the reimburses hospitals and physicians for medical care to persons above 65
- Medicaid
- Helps people who can not finance their own medical expenses
- Reagan's college major
- Economics
- supply-side economics
- A return to the ideas of laissez-faire, hoped to reduce both unemployment and inflation, govt cools off economy by reducing demand for goods and services
- Reasons behind Recovery Act of 1981
- ? Productivity was reduced by high taxes, Marginal Tax Rates must be reduced, people needed incentives to work
- Gramm-Rudman-Hollings Act of 1985
- Wanted to shrink the deficit for the budget to be balanced by 1991
- Air traffic controllers dispute
- Federally employed workers were not allowed to strike, so when air traffic controllers did, Regan fired them
- Progressive tax
- Takes higher percentage of tax from high-income than lower income
- regressive tax
- Takes higher percentage of tax from low-income than high-income.