economics 976-1020 Flashcards
in a balance of international payments, exports are listed as (credit/debit) items
credit
if an item provides us with more foreign currency, it counts as a (credit/debit) in our balance of international payments
balance
the relationship between the value of a nation’s exports and the value of its imports is called the trade _____.
surplus
a tred (surplus/deficit) occurs when the value of exports exceeds the value of imports
creditor
The United States emerged from WW1 as a new (creditor/debtor) nation.
debit
in a balance of international payments, imports are listed as (credit/debit) items.
a good or service produce domestically and sold to consumers in another country
define export
debtor
young nations are usualy (creditor/debtor) nations
an measure of the flow of products and capital resources between a country and the rest of the world
what is a alance of international payments
it mus either run down its assets or owe money
how does a country pay for a trade deficit
the sherman antitrust act of 1890
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
not necessarily
is a trade deficit always bad
TRUE
T/F : Mercantilists thought that rtrade surpluses were good becase they meant gold would flow into the home country
a trade restriction imposed by several allies against one or more nations
what is a multilateral trade sanction
it ended border controls a tariffs and began monetary coordination among members of the European Community
what did the maastricht treaty accomplish
a ban on the trade of a good, or ban on trade with a nation altogether
what is an embargo
they believe that infant industries stand a better chance of surviving if established foreign competitors are not allowed to drive out of business
why do protectionists wish to assist infant industries by restricting trade
high-tariff
the United states has traditionally been a (high-tariff/low-tariff) nation
TRUE
true or false: in the year 2000, the united states lifted some trade sanctions against Cuba on medical and agricultural god.
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.
what is the official definition of unemployment?
1%
according to Okun’s law, if GDP falls 2% relative to potential GDP, by how much does the unemployment rate increase?
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.
What is branding?
the unemployment of people who are between jobs.
What is frictional unemployment?
a rise in the general price level in an economy.
What is inflation?
an extremely high rate of inflation.
What is hyperinflation?
cost-push inflation.
when the prices of factors of production increase rapidly, what kind of inflation is likely to result?
Like it? you love it.
If you’re over your head in debt, do you like or dislike inflation?
more
At higher interest rates, individual save money?
None; a credit card transaction is like a short-term lone.
credit cards are part of which money supply definition?
GDP deflator
the measures the largest variety of price levels?
a checking account
which of the following is the most liquid: a checking account, a savings, or a government bond?
low
Individuals are more likely to invest in stock if interest rates are?
demand
A checking account is also know as a _____ deposit.
high unemployment and high inflation; low unemployment and low inflation
Name two unemployment/ inflation combinations NOT shown in the phillips curve.
currency, checking accounts and traveler’s checks
what constitutes m1?
interest compensates individuals for putting money in savings.
how do interest rates give individuals an incentive to save?
dislike
if you keep all your money in cash, hidden under your bed, do you like or dislike inflation?
all are measures of the current price level
what do the CPI, the PPI, and the GDP deflator have in common?
price- interest is the cost of borrowing money
interest can be seen as the (price/quantity) of money.
TRUE
true or false: the U.S. dollar is an example of fiat money.
it raises the pice level
what does inflation do to the price level of an economy?
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.
Explain why Gresham’s law holds.
the see with which money can be converted to cash.
to what does liquidity refer?
Demand-pull inflation is the result of a shortage; demand in excess of supply causes consumers to bid the price level upward.
Define “demand-pull inflation.”
Bad money drives out good money.
