Random Review Flashcards

1
Q

Globalization

A

The process of greater interdependence among countries and their citizens. Increased interaction of product and resource markets.

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2
Q

Waves of Globalization (dates)

A
  1. Industrial - WWI (1870-1914)
  2. WWII - 1980’s (1945-1980)
  3. 80’s - Present (1980-Now)
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3
Q

Equation for Openness

A

(Exports + Imports) / GDP

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4
Q

Fallacies of International Trade

A
  1. Zero-sum game
  2. Imports = bad, exports = good
  3. Tariffs, quotas, etc. save jobs and promote employment
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5
Q

Absolute Advantage

A

When a country can produce more of any set of goods with fewer inputs.

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6
Q

Commodity Terms of Trade

A

(Export Price Index / Import Price Index) x 100

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7
Q

Heckscher-Ohlin Theory

A

Factor endowment

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8
Q

Overlapping Demand Theory

A

Rich countries want more expensive goods and poor countries demand cheap goods

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9
Q

Increasing Opportunity Costs

A

Curve is bowed outward

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10
Q

Cyclical Unemployment

A

Results from fluctuation in economic activity–business cycles
(Ideal level = 0)

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11
Q

Frictional Unemployment

A

People moving from one job to another; includes seasonal unemployment
(ideal level = 2-2.5%)

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12
Q

Structural Unemployment

A

Open jobs but people don’t have necessary skills

ideal level = 2-2.5%

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13
Q

Unemployment Rate

A

(# of unemployed persons / labor force) x 100

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14
Q

Employment Act of 1946

A

Gives responsibility to government to create full employment (aka 4.5%)

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15
Q

Technical Efficiency

A

Any point along the production possibilities curve - infinite number of points

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16
Q

Allocative Efficiency

A

ONE POINT along the curve that makes society’s overall welfare/ satisfaction as high as it can be.

17
Q

Law of Increasing Relative Costs

A

In order to get extra amounts of one good, society must sacrifice ever-increasing amounts of other goods.

18
Q

Determinants of Investment

A
  1. Cost of production
  2. Taxes
  3. Technological change
  4. Stock of Capital Goods
  5. Expectations
19
Q

Determinants of Consumption

A
  1. Consumers’ accumulated wealth
  2. Price level
  3. Economic expectations
  4. Current levels of debt
  5. Stock of durable goods
  6. Taxes
20
Q

Determinants of Demand

A
  1. Income
  2. Price of related goods
  3. Future prices
  4. Tastes/ preferences
  5. Advertising
21
Q

Determinants of Supply

A
  1. Price of inputs
  2. Number of sellers
  3. Technology (automation)
  4. Weather
  5. Political disruptions
  6. Price of related goods
22
Q

Determinants of Elasticity

A
  1. Availability of substitutes
  2. Proportion of income
  3. Luxury v. Necessity
  4. Elapsed time of purchase choice
23
Q

Ranges of Elasticity

A

In terms of absolute value:
> 1 = Elastic
< 1 = Inelastic
= 1 = Unit elastic

24
Q

Longitudinal Data

A

Many entities over time

25
Cross Sectional Data
Many entities one time period
26
Delphi Method
Employs independent party to elicit a consensus opinion
27
Time Series Data
One entity over time
28
Oligopoly Characteristics
1. Few sellers 2. Unique or homogeneous product 3. Blocked entry/ exit 4. Imperfect information
29
Monopolistic Competition Characteristics
1. Large # of buyers and sellers 2. Comparable and differentiated products 3. Free entry and exit 4. Perfect information
30
Perfect Competition Characteristics
1. Large # of buyers 2. Large # of sellers 3. Identical product 4. Free entry/ exit 5. Perfect information
31
Monopoly Characteristics
1. One seller 2. Unique product 3. Blocked entry and exit 4. Imperfect information
32
Opportunity Cost of Good "A"
(maximum production of "b") / | maximum production of "a"
33
Cobb-Douglas Production Fcn
Q = a * K^alpha * L^beta alpha + beta = 1 => constant returns
34
Point Elasticity of Demand
dQ/dP * P/Q