economics 976-1020

Question 1

in a balance of international payments, exports are listed as (credit/debit) items

Answer 1

credit

Question 2

if an item provides us with more foreign currency, it counts as a (credit/debit) in our balance of international payments

Answer 2

balance

Question 3

the relationship between the value of a nation’s exports and the value of its imports is called the trade _____.

Answer 3

surplus

Question 4

a tred (surplus/deficit) occurs when the value of exports exceeds the value of imports

Answer 4

creditor

Question 5

The United States emerged from WW1 as a new (creditor/debtor) nation.

Answer 5

debit

Question 6

in a balance of international payments, imports are listed as (credit/debit) items.

Answer 6

a good or service produce domestically and sold to consumers in another country

Question 7

define export

Answer 7

debtor

Question 8

young nations are usualy (creditor/debtor) nations

Answer 8

an measure of the flow of products and capital resources between a country and the rest of the world

Question 9

what is a alance of international payments

Answer 9

it mus either run down its assets or owe money

Question 10

how does a country pay for a trade deficit

Answer 10

the sherman antitrust act of 1890

Question 11

what law made it illegal to monopolize any pat of trae r commerce among the several states and outlawed any combination or conspiracy in restraint of trade

Answer 11

not necessarily

Question 12

is a trade deficit always bad

Answer 12

TRUE

Question 13

T/F : Mercantilists thought that rtrade surpluses were good becase they meant gold would flow into the home country

Answer 13

a trade restriction imposed by several allies against one or more nations

Question 14

what is a multilateral trade sanction

Answer 14

it ended border controls a tariffs and began monetary coordination among members of the European Community

Question 15

what did the maastricht treaty accomplish

Answer 15

a ban on the trade of a good, or ban on trade with a nation altogether

Question 16

what is an embargo

Answer 16

they believe that infant industries stand a better chance of surviving if established foreign competitors are not allowed to drive out of business

Question 17

why do protectionists wish to assist infant industries by restricting trade

Answer 17

high-tariff

Question 18

the United states has traditionally been a (high-tariff/low-tariff) nation

Answer 18

TRUE

Question 19

true or false: in the year 2000, the united states lifted some trade sanctions against Cuba on medical and agricultural god.

Answer 19

A person is unemployed if he or she is not currently working and is either waiting for recall after being laid of or has actively looked for work in the last four weeks.

Question 20

what is the official definition of unemployment?

Answer 20

1%

Question 21

according to Okun’s law, if GDP falls 2% relative to potential GDP, by how much does the unemployment rate increase?

Answer 21

Product differentiation; convincing the consumer that a particular firm has a “better” product even though the products in the market may all be quite similar.

Question 22

What is branding?

Answer 22

the unemployment of people who are between jobs.

Question 23

What is frictional unemployment?

Answer 23

a rise in the general price level in an economy.

Question 24

What is inflation?

Answer 24

an extremely high rate of inflation.

Question 25

What is hyperinflation?

Answer 25

cost-push inflation.

Question 26

when the prices of factors of production increase rapidly, what kind of inflation is likely to result?

Answer 26

Like it? you love it.

Question 27

If you’re over your head in debt, do you like or dislike inflation?

Answer 27

more

Question 28

At higher interest rates, individual save money?

Answer 28

None; a credit card transaction is like a short-term lone.

Question 29

credit cards are part of which money supply definition?

Answer 29

GDP deflator

Question 30

the measures the largest variety of price levels?

Answer 30

a checking account

Question 31

which of the following is the most liquid: a checking account, a savings, or a government bond?

Answer 31

low

Question 32

Individuals are more likely to invest in stock if interest rates are?

Answer 32

demand

Question 33

A checking account is also know as a _____ deposit.

Answer 33

high unemployment and high inflation; low unemployment and low inflation

Question 34

Name two unemployment/ inflation combinations NOT shown in the phillips curve.

Answer 34

currency, checking accounts and traveler’s checks

Question 35

what constitutes m1?

Answer 35

interest compensates individuals for putting money in savings.

Question 36

how do interest rates give individuals an incentive to save?

Answer 36

dislike

Question 37

if you keep all your money in cash, hidden under your bed, do you like or dislike inflation?

Answer 37

all are measures of the current price level

Question 38

what do the CPI, the PPI, and the GDP deflator have in common?

Answer 38

price- interest is the cost of borrowing money

Question 39

interest can be seen as the (price/quantity) of money.

Answer 39

TRUE

Question 40

true or false: the U.S. dollar is an example of fiat money.

Answer 40

it raises the pice level

Question 41

what does inflation do to the price level of an economy?

Answer 41

consumers hoard currency that is valuable rather than spending it. they spend currency that is less valuable. thus, a real gold coin that is stamped “25 cents” will be hoarded while a regular quarter is spent.

Question 42

Explain why Gresham’s law holds.

Answer 42

the see with which money can be converted to cash.

Question 43

to what does liquidity refer?

Answer 43

Demand-pull inflation is the result of a shortage; demand in excess of supply causes consumers to bid the price level upward.

Question 44

Define “demand-pull inflation.”

Answer 44

Bad money drives out good money.