Glossary of Economic and Political Terms

Antitrust Policy

Government regulation of businesses to ensure competition and prevent monopolies (control of a market by one company).

Capitalism

An economic system in which individuals and corporations own the principal means of production, through which they seek to reap profits.

Collective Bargaining

The right of workers to have labor union representatives negotiate with management to determine working conditions.

Consumer Price Index (CPI)

A government statistic that measures the change in the cost of buying a fixed basket of goods and services.

Federal Reserve System

Created by Congress in 1913 to regulate the lending practices of banks and thus the money supply.

Fiscal Policy

The government's decisions to tax, spend, and borrow, as reflected in the federal budget.

Food and Drug Administration (FDA)

Government agency with broad regulatory powers over the manufacturing, contents, marketing, and labeling of food and drugs.

Inflation

A government statistic that measures increases in the price of goods.

Keynesian Economic Theory

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.

Laissez-Faire

A belief that government should not intervene in the economy.

Mixed Economy

A system in which the government, while not commanding the economy, is still deeply involved in economic decisions.

Monetarism

Economic theory that suggests that the supply of money is key to the nation's economic health.

Monetary Policy

Government decisions regarding the money supply, including the discount rates for bank borrowing, reserve requirements for banks, and trading of government securities.

Multinational Corporation

Businesses with vast holdings in many countries.

National Labor Relations Act

Passed by Congress in 1935, guarantees workers the right of collective bargaining; also known as the Wagner Act.

Protectionism

The economic policy of shielding an economy from imports.

Right-to-Work Laws

Laws forbidding labor contracts from requiring workers to join unions to hold their jobs.

Securities and Exchange Commission

The federal agency created during the New Deal that regulates stock fraud.

Supply-Side Economics

Economic philosophy that holds that the key task for government economic policy is to stimulate the supply of goods, not their demand.

Unemployment Rate

A government statistic that measures how many workers are actively seeking work but unable to find jobs.