Test 1 (practice) Flashcards
Things that are valuable are things that are ___________________
-
Costs that are paid in money are called:
explicit costs
Opportunity cost is the cost:
of what we give up when we make a decision
Globalization is defined as:
the economic integration of nations
- When globalization has been effective historically, it’s been because it was based on:
technological advances such as steamships or the internet
On the __________ is the economist’s word for making
decisions based on the costs or benefits of one more of something.
Margin
(True/False) Mercantilism believes that trade is a form of war, no different than fighting with
guns
True
_______________ was the name of the person who taught us that competition is required for
markets to work correctly.
Adam smith
England made the American colonies and India produce raw materials, sell them only to England, then buy finished products back from England. This means England:
was using Mercantilism to make themselves richer at our expense
(True/False) Comparative advantage requires that countries limit trade to targeted
industries only.
False
Supply and demand says if there is a shortage of school teachers:
the price of school teachers is too low
look at graph in the practice exam
-
(True/False) An export requires that money enter your country and flow out of another.
true
Foreign ___________ is the economist’s term for money of other countries.
exchange
The sale of oranges from the US to Japan would show up in the ___________________ account
of the US Balance of Payments?
current
The purchase of AMC Theaters by China would show in the ______________________ account
of the Balance of Payments
financial / capital financial.
The ________________ is the name of the bank that was created in Bretton Woods.
International Monetary fund.
(True/False) An increase in imports to the US from China should raise the value of the dollar
against the Yuan.
False, lower the value
The entire balance of payments (all parts) adds up to
0
(True/False) Prior to Bretton Woods, most world trade was paid for in gold.
True
Exchange rates set by the market are called ________ exchange rates.
floating
(True/False) The Bretton Woods system made the US dollar the key currency in the world.
True
If the US has a trade deficit, how will it be corrected if markets are free to work?
the dollar will fall
GDP measures:
total production in the economy.
total expenditure as well.
