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Economics > 1143 Questions & Blanks > Flashcards

1143 Questions & Blanks Flashcards

1
Q

International trade has ________ since it began

A

increased

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2
Q

International trade decreased during the Great Depression because of _______

A

decreased income and increased trade restrictions

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3
Q

The value of a nation’s exports in generally _____

A

about the same as the value of its imports

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4
Q

A nation that can produce a good at a lower cost than another nation has an _______ in the _____ of that good

A

absolute advantage

production

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5
Q

________ advantage is more common than __________

A

Comparative

absolute

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6
Q

All nations benefit if each produces and exports goods in which it has the ___________ and imports goods in which it has the _________

A

greatest relative efficiency

least relative efficiency

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7
Q

If one nation has a comparative advantage in producing one good,

A

the other nation must have a comparative advantage in the other good

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8
Q

When there is more competition,

A

citizens receive the gains

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9
Q

Nations with the __________ realize more gains

A

greatest economies of scale

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10
Q

________ nations tend to receive a larger percentage of the gains.

A

smaller

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11
Q

When trade occurs between a large and a small nation, the ___________ receives more benefit from the trade because

A

smaller

trade provides more opportunities and therefore more relative gains for that nation

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12
Q

Almost no nation allows completely ______

A

free trade

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13
Q

Tariffs usually result in a _______ for both domestic and imported goods.

A

price increase

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14
Q

A _____ forces producers to become more efficient

A

tariff

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15
Q

Most economists prefer

A

free trade

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16
Q

Restrictions protect infant:

A

foreign industries

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17
Q

Restrictions protect ________ workers

A

domestic

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18
Q

Restrictions protect national

A

security

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19
Q

Restrictions provide increased ________

A

government revenue

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20
Q

Free trade ________ total output

A

increases

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21
Q

Free trade encourages

A

international competition

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22
Q

Free trade benefits ____

A

everyone

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23
Q

Free trade encourages peace.

A

.

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24
Q

Trade restrictions are seldom ______

A

beneficial

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25
Q

Since 1976 the United States has been running a ________, and today it has a larger ___________ than any other nation

A

trade deficit

national debt

26
Q

The factors determining whether a nation runs a trade surplus or deficit are ____

A

its competitiveness and the relative state of its economy

27
Q

An increase in the trade deficit reduces the __________

A

income of an average worker

28
Q

Domestic production _________ during a trade deficit

A

decreases

29
Q

Free trade allows

A

more people to enjoy economic freedom and prosperity
the laws of supply and demand to control the international market
businesses and nations to produce competitive and profitable goods
all consumers to benefit from high-quality, low-priced goods

30
Q

Although free trade is preferable, governments impose trade restrictions because __________ such as low inflation, high growth, and low unemployment are important to them

A

domestic interests

31
Q

International finance is more complicated than domestic finance because ______

A

it involves the exchange of one currency for another

32
Q

The price of everything in an economy is dependent on the ___________.

A

value of its currency

33
Q

The value of a nation’s currency and its _____ affect other nations

A

monetary and fiscal policies

34
Q

Because a nation’s monetary and fiscal policies influence ___________, income, and price levels, they ultimately affect _______.

A

interest rates

exchange rates

35
Q

Any increase in ____ or in _____ decreases the value of a nation’s currency

A

price

income

36
Q

Payments coming into a nation are

A

credits

37
Q

Payments going out of a nation are

A

debits

38
Q

On a balance of payments account, incoming payments are indicated by a + and outgoing payments are indicated by a -

A

.

39
Q

The combined value of all transactions listed on a balance of payments account _____

A

must equal zero

40
Q

The three major categories of a balance of payments are __________, ____________, and the _____________

A

capital account
current account
official transactions account

41
Q

No ____________ has the power to set economic policies by taxation, redistribution of income, imposition of regulations, or enforcement of property rights.

A

international organization

42
Q

Adherence to international economic policies is purely _______

A

voluntary

43
Q

Money is a highly ______ that makes the economy function smoothly

A

liquid financial asset

44
Q

Three functions of money

A

medium of exchange
measure of value
store of wealth

45
Q

For money to function in a modern economy,

A

all people must believe that all other people will accept it in exchange for other goods

46
Q

To prevent fluctuations in the money supply, the money _________ must control the supply.

A

issuer

47
Q

The ____________ issues money in the U.S.

A

Federal Reserve Bank

48
Q

Any measurement of money is meaningful because it conveys a ____________

A

relative price

49
Q

Banks __________ by using deposited funds as the basis for additional deposits in the form of loans

A

create money

50
Q

The economic problems that may result from the creation of money by banks include

A

an increase in prices and a decrease in the value of money
a financial panic when depositors all demand their money at once
bank failures

51
Q

Included as disadvantages to government insurance of deposits are the facts that ______

A

they are very expensive

they remove an effective restraint on bank lending policies

52
Q

Fannie Mae and Ginnie Mae are government-organized companies that ___________ from banks

A

sell bonds and purchase mortgages

53
Q

The Bible teaches that we are to lay up treasures in _______ rather than accumulate _________

A

Heaven

earthly wealth

54
Q

the ___________ guarantees bank deposits through the FDIC and various bonds

A

government of the US

55
Q

A ____ asset offers a higher rate of return but it less liquid and takes more than one year to mature

A

capital market

56
Q

a loan secured by real estate

A

mortgage

57
Q

FDIC

A

Federal Depository Insurance Corporation

58
Q

EMU

A

European Monetary Union

59
Q

An S&L is a ___________

A

savings and loan institution

60
Q

sale to a third party to avoid trade restrictions

A

transshipment

61
Q

Arguments in favor of trade restrictions

A

protection of domestic industries and workers
protection of national security
increased revenue

Economics (12 decks)

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