12.1 Party Ideology
- Party ideology - a party’s philosophy about the government and its position on issues
- Pary identification - an individual’s attachment to a political party
- The republicans are associated with conservatisim - favoring control of social behavior, freer economy
- The democrats are associated with liberalism - supports less control of social behavior, more regulated economy
- Libertarianism - favors little government regulation adn intervention beyond protecting property and individual rights
12.2 Ideology and Economic Policymaking
Government Intervention in the Economy
- Laissez-faire economy - little government intervention in the economy
- Command-and-control economy - government dictates everything in the economy
- Mixed economy - The US has it, a mix of both types
Monitoring the Health of the Economy
- GDP (Gross Domestic Product) - total value of goods and services produced by economic activity
- Economic recession - a decline in GDP may mean this
- Unemployment rate - measured by how many people are looking for work
- Inflation - the rate of price increase, a high rate makes workers poorer
- Consumer price index (CPI) - measures cost of a basket of fixed goods and services over time
Business Cycles & Theories of Economic Policymaking
- Fiscal policy - government use of taxes & spending to lower unemployment, support economic growth, and stabilize the economy
Keynesianism (Demand-Side Theory)