Chapter 11 Vocabulary Flashcard: Government and the Economy

Front

What is "regulation" in economics?

Back

Government rules to control business operations

Front

What is the main purpose of a regulatory agency?

Back

To ensure businesses follow laws

Front

Which is an example of "deregulation"? Options: Increasing rules for financial institutions, Removing restrictions on airline ticket pricing, Imposing new safety standards for automobiles, Nationalizing the telecommunications industry

Back

Removing restrictions on airline ticket pricing

Front

What is "eminent domain"?

Back

The government's right to take private property for public use, with compensation

Front

How is the "poverty rate" measured?

Back

By the percentage living below the poverty line

Front

Which scenario is an example of "government failure"? Options: Successful public health campaign reducing smoking, Regulatory agency enforcing environmental laws, Policy to reduce traffic that increases pollution, Government program reducing poverty rate

Back

Policy to reduce traffic that increases pollution

Front

What is a "common resource" in economic terms?

Back

A resource available to all but can be overused

Front

What is a "merger"?

Back

Combining companies into one

Front

What is the purpose of deregulation in an industry?

Back

To reduce barriers and increase competition

Front

What is a possible result of "government failure" because of inefficient allocation or distribution of resources?

Back

Negative effects on the economy or society