Chapter 15 Vocabulary - Political Science: An Introduction

Define bailout

• Emergency government loan to save firm from collapse.

• Cutting government spending

• Influence of politics and economy on each other; what government should do in the economy.

• What a government tries to do; the choices it makes among alternatives

Define austerity

• Emergency government loan to save firm from collapse.

• Cutting government spending

• Influence of politics and economy on each other; what government should do in the economy.

• What a government tries to do; the choices it makes among alternatives

Define political economy

• Emergency government loan to save firm from collapse.

• Cutting government spending

• Influence of politics and economy on each other; what government should do in the economy.

• What a government tries to do; the choices it makes among alternatives

Define public policy

• Emergency government loan to save firm from collapse.

• Cutting government spending

• Influence of politics and economy on each other; what government should do in the economy.

• What a government tries to do; the choices it makes among alternatives

Define business cycle

• Tendency of economy to alternate between growth and recession over several years.

• Period of economic decline; a shrinking GDP.

• A general, overall rise in prices.

• “The Fed”; U.S. central bank that can raise and lower interest rates.

Define recession

• Tendency of economy to alternate between growth and recession over several years.

• Period of economic decline; a shrinking GDP.

• A general, overall rise in prices.

• “The Fed”; U.S. central bank that can raise and lower interest rates.

Define inflation

• Tendency of economy to alternate between growth and recession over several years.

• Period of economic decline; a shrinking GDP.

• A general, overall rise in prices.

• “The Fed”; U.S. central bank that can raise and lower interest rates.

Define Federal Reserve

Board

• Tendency of economy to alternate between growth and recession over several years.

• Period of economic decline; a shrinking GDP.

• A general, overall rise in prices.

• “The Fed”; U.S. central bank that can raise and lower interest rates.

Define balance of payments

• The value of what a country exports compared with what it imports.

• Dollar buys set amounts of foreign currencies.

• Dollar buys varying amounts of foreign currencies, depending on market for them.

• Combination of slow growth plus inflation in the U.S. economy in the 1970s.

Define fixed exchange rate

• The value of what a country exports compared with what it imports.

• Dollar buys set amounts of foreign currencies.

• Dollar buys varying amounts of foreign currencies, depending on market for them.

• Combination of slow growth plus inflation in the U.S. economy in the 1970s.