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Economics > Quiz 4 > Flashcards

Quiz 4 Flashcards

1
Q

Why do nations trade ?

A

We are lacking in resources, higher in profit

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2
Q

Define opportunity cost

A

The most desirable alternative given up as a result of a decision

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3
Q

What is an export ?

A

Putting out goods to other countries

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4
Q

What is an import ?

A

Something we get from other countries

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5
Q

What country is the largest importer ?

A

United States

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6
Q

What country is the largest exporter ?

A

United States

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7
Q

What are the three most common trade barriers ?

A

Import quotas
Voluntary export restraint (V.E.R)
Tariffs

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8
Q

Define Tariffs

A

Tax on imported goods

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9
Q

What is a trade war ?

A

A cycle of increasing trade restrictions

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10
Q

Define protectionism

A

The use of trade barriers to protect a nations’ industries from foreign competition

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11
Q

Does the US have a trade surplus or trade deficit ?

A

Trade deficit

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12
Q

Why are we in a trade war with China ?

A

Exporting to many goods at cheap prices

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13
Q

Natural resources

A

Land

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14
Q

Human resources

A

Labor

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15
Q

Human capital

A

Knowledge and skills gained by working through education and experience

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16
Q

Absolute advantage

A

The ability to produce more of a given product using all the other products that could be produced

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17
Q

Comparative advantage

A

The ability to produce a product most efficiently given all the other products that could be produced

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18
Q

Trade barrier

A

A means of preventing a foreign product or service from freely entering a nation’s territory

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19
Q

Competition

A

Markets that set prices

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20
Q

Import quota

A

A limit on the amount of a good that can be imported

21
Q

V.E.R

A

Limited exports to a specific country

22
Q

Tariffs

A

Tax on imported goods

23
Q

Why we have import quotas

A

Protect U.S manufacturing
Protect consumers
Protect prices

24
Q

Why do we have V.E.R. ?

A

So another country won’t put up a trade barrier

25
Q

Trade surplus

A

The result of a nation exporting more than its imports

26
Q

Trade deficit

A

The result of a nation importing more than its exports

27
Q

Who is the number one producer of oil in the world ?

A

America

28
Q

Who owns the oil ?

A

Business

29
Q

What is shale ?

A

Fracking

30
Q

Who has the largest reserve of shale oil ?

A

Texas

31
Q

Gold standard

A

Currency was based on

32
Q

Floating dollar

A

Doesn’t have any worth

Can change at anytime

33
Q

Who was adding tax ?

A

United States

34
Q

1 Euro

A

$1.16 USD

35
Q

1 Yuan

A

$0.14 USD -> $0.09 USD (because of devaluing dollar)

36
Q

Why did China had a big export month ?

A

They wanted to sell to the U.S.

37
Q

Money manipulation

A

Purposely devaluing currency to get around tariff

38
Q

How much did China devalue its currency ?

A

6%

39
Q

Benefits for devaluing $

A 
Increasing export (now they sell more) 
Increasing internal spending (domestic) *(now they pay more because it's devalued)
40
Q

Costs for devaluing $

A

Increasing cost on domestic product (inflation)
Slows the economy
Increasing employment rate
Increasing debt payment

41
Q

Is the costs for devaluing $ long term or short term ?

A

Long term effects

42
Q

Stakeholders

A

A person with an interest or concern in something, especially a business

43
Q

Who are stakeholders ?

A

Consumers
Employees
Small business around the bigger business

44
Q

What could happen to small businesses if big business take over ?

A

They can go out of business

45
Q

What can the government cut ?

A

Military spending

46
Q

Recession is the opposite of what ?

A

Inflation

47
Q

Inflation

A

A general increase of prices

48
Q

Recession

A

A prolonged economic contraction

Economics (10 decks)

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