ap gov study guides

⚖️  Unit 2: Interactions Among Branches of Government

🗳  Unit 5: Political Participation

4.9 Ideology and Economic Policy



⏱️  1 min read

written by

isabela padilha vilela

June 8, 2020

Economic Issues 

Economy is an important factor for the citizens when deciding who to vote for in the next elections. Depending on the economic situation of the country, citizens express their support or dissatisfaction with the economic policies. 

Most Democratic economic policies favor the idea that the government should have a great interference in these issues. On the other hand, Republicans think that the less interference, the better! Due to this disparity in economic beliefs, each political party follows a different approach to economic issues. 

Important Terms



  • Fiscal Policy 

It is the way that the government manages the economy through taxes, borrowing and spending money. Democrats usually support a progressive tax policy, whereas Republicans want to decrease the amount of tax citizens pay. 

  • Monetary Policy 

The way the government influences the economy through money supply and interest rates. 

  • Laissez-Faire 

Theory created by Adam Smith that states that the government should have the least amount of interference in the economy. 

  • Keynesian Economics 

Consists on stimulating growth in order to stabilize the economy. Government spending should increase during slumps. 

Some economic issues are still topics of debate among parties, such as the minimum wage. Throughout the years, it is possible to affirm that the Republican party is very opposed to increasing the minimum wage, whereas the Democrats are mostly in favor of raising it. 💰💸

Watch AP Gov teacher Allison Powell review this key topic here.

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