Glossary
Centrism
A political and economic ideology that supports a balanced approach to government intervention, advocating for limited intervention to ensure stability and fairness while avoiding excessive market interference.
Example:
A Centrism approach to healthcare might involve a mix of private insurance and government subsidies to expand access.
Conservative Economics
An economic ideology that favors minimal government intervention in the marketplace, believing that free markets and individual initiative are the most effective drivers of economic growth.
Example:
A politician advocating for Conservative Economics would likely propose tax cuts for businesses and deregulation to stimulate the economy.
Contractionary Fiscal Policy
A type of fiscal policy involving reduced government spending or increased taxes, typically used to cool down an overheating economy and control inflation.
Example:
If inflation is high, the government might implement Contractionary Fiscal Policy by cutting federal spending on certain programs.
Contractionary Monetary Policy
A type of monetary policy involving decreasing the money supply and raising interest rates, used to slow down economic growth and combat inflation.
Example:
If the economy is growing too fast and prices are rising rapidly, the Federal Reserve might implement Contractionary Monetary Policy by increasing the federal funds rate.
Expansionary Fiscal Policy
A type of fiscal policy involving increased government spending or reduced taxes, typically used during recessions to stimulate economic growth.
Example:
During an economic downturn, Congress might pass a bill for a large public works program, which is an example of Expansionary Fiscal Policy.
Expansionary Monetary Policy
A type of monetary policy involving increasing the money supply and lowering interest rates, used to stimulate economic growth by encouraging borrowing and spending.
Example:
To combat a recession, the Federal Reserve might engage in Expansionary Monetary Policy by buying government bonds, which injects money into the banking system.
Fiscal Policy
The government's use of spending and taxation to influence the economy.
Example:
When the government decides to build new infrastructure projects or change income tax rates, it is employing Fiscal Policy.
Keynesian Economics
An economic theory advocating for an active government role in regulating the marketplace, primarily through fiscal and monetary policies, to stabilize the economy and prevent recessions by boosting demand.
Example:
President Franklin D. Roosevelt's New Deal programs, which involved significant government spending during the Great Depression, are often cited as an application of Keynesian Economics.
Liberal (Progressive) Economics
An economic ideology that advocates for significant government intervention and regulation of the marketplace to promote fairness, equality, and economic opportunity.
Example:
A government adopting Liberal (Progressive) Economics might raise the minimum wage and increase funding for public education and healthcare programs.
Monetary Policy
Actions undertaken by a central bank, like the Federal Reserve, to influence the availability and cost of money and credit to help promote national economic goals.
Example:
The Federal Reserve's decision to raise or lower interest rates is a key tool of Monetary Policy.
Progressivism
An ideology that supports an active government role in regulating the marketplace to promote fairness, equality, and protect rights, often seeking to prevent wealth concentration and ensure economic stability.
Example:
Advocates of Progressivism might push for stricter environmental regulations and consumer protection laws.
Socialism
An economic ideology that supports an active government role in regulating the marketplace to ensure fair and equitable economic operation, often emphasizing a strong social safety net and prevention of monopolies.
Example:
A country with strong Socialism principles might have universal healthcare and extensive public ownership of utilities.
Supply-Side Economics
An economic theory that supports a limited government role in the marketplace, believing that economic growth is best stimulated by cutting taxes and regulations to create a favorable business environment.
Example:
The tax cuts enacted during the Reagan administration in the 1980s were a prominent example of policies based on Supply-Side Economics.