Test 9

Question 1

Exports

Answer 1

Goods or services that are sold to a buyer in another country

Question 2

Balance of Trade

Answer 2

A comparison of the nations imports and exports

Question 3

Trade Surplus

Answer 3

When your exports exceed your imports

Question 4

Trade Deficit

Answer 4

When your imports exceed your exports

Question 5

Absolute Advantage

Answer 5

A situation where a country can produce more of a good than another country can produce with the same quantity of resources

Question 6

Comparative Advantage

Answer 6

A situation where a country can produce a good at lower opportunity cost than another country

Question 7

Barriers to Trade

Answer 7

1. Tariff
2. Quotas
3. Export Subsidy

Question 8

Tariff

Answer 8

Tax on imported goods

Question 9

Types of Tariffs

Answer 9

1. Revenue Tariff

2. Protective Tariff

Question 10

Revenue Tariff Purpose

Answer 10

To raise money for the government

Question 11

Protective Tariff Purpose

Answer 11

To protect domestic industry from foreign competition

Question 12

Quotas

Answer 12

A restriction on the number of goods that can enter the country from abroad

Question 13

Export Subsidy

Answer 13

A payment by a country to its exporters that enables them to sell their products to other countries at a lower price that they can sell them for at home

Question 14

Why do nations restrict international trade?

Answer 14

1. To protect industries that are essential to national defense
2. To protect infant industries
3. To diversify the economy
4. Protection form cheap foreign labor
5. To stimulate economic growth
6. It can be used as retaliation against other countries

Question 15

Free Trade

Answer 15

The absence of any form of government interference in international trade

Question 16

Free Trade Assosiation

Answer 16

An agreement between countries to remove the barriers of trade

Question 17

Customs Union

Answer 17

Promotes Free Trade among its members, but imposes a common tariff on non-member countries

Question 18

Imports

Answer 18

A good or service that is purchased from a seller in another country

Question 19

Major Agriculture Programs

Answer 19

1. Set Aside Program
2. Acreage Allotments
3. Government Disposal of Surplus Crops

Question 20

Set Aside Program

Answer 20

Pays farmers to take land out of production to decrease supply and prevent overproduction

Question 21

Acreage Allotments

Answer 21

Allocates an acreage base to a farm involuntarily

Question 22

Government disposes of surplus crops

Answer 22

The Government buys surplus crops and then destroys it

Question 23

Determinants of Equilibrium of Wages

Answer 23

1. Compensation Differentials
2. Human Capital
3. Ability, Effort, and Chance
4. Signaling

Question 24

Compensating Differentials

Answer 24

Difference in wages that arise from non-monetary characteristics of different jobs

Question 25

Human Capital

Answer 25

The accumulation of investments in people

Question 26

Ability, Effort, and Chance

Answer 26

More attractive people will about 5% more in their lifetime than people with average people Average looking people will make 5-10% more in their lifetime than below average looking people

Question 27

Signaling

Answer 27

An action taken by an informed party to reveal private information to an uninformed party

Question 28

Signaling Example

Answer 28

A person with a college degree signals to the employer that he is more dedicated than the other candidate

Question 29

Discrimination

Answer 29

The offering of different opportunities to similar individuals who differ only by race, ethnic group, gender, age, or other personal characteristics

Question 30

Poverty Rate

Answer 30

The percentage of the population who's family income falls below an absolute level called the Poverty Line

Question 31

Poverty Line

Answer 31

An absolute level of income set by the federal government, for each family size, below which a family is deemed to be in poverty

Question 32

Government Programs to Help Poverty

Answer 32

1. Food stamps 2. Housing vouchers 2. Obamacare/Medicaid

Question 33

Life Cycle

Answer 33

The regular pattern of income variation over a person's life

Question 34

What Age Does the Average Americans Income Peak?

Answer 34

50

Question 35

How many people are below the Poverty Line?

Answer 35

In a typical 10 year period, 1 out of 4 families will fall below the poverty line for at least one year

Question 36

How many millionaires are first generation? (first in their family)

Answer 36

4 out of 5

Question 37

Utilitarianism

Answer 37

The political philosophy according to which the government should choose policies to maximize to total utility of everyone in society

Question 38

Who started Utilitarianism

Answer 38

Jeremy Bentham and John Stuart Mill

Question 39

What is the goal of Utilitarianism

Answer 39

apply the logic of individual decision-making to generations concerning...

Question 40

Utility

Answer 40

The level of happiness or satisfaction that a person receives from his or her circumstances

Question 41

Liberalism

Answer 41

1. Society's institutions, laws, and policies must be just | 2. Can we objectively determine what a just society should be?

Question 42

What novel is under Liberalism?

Answer 42

John Rawls A Theory of Justice

Question 43

Libertarianism

Answer 43

The political philosophy according to which the | government should punish crimes and enforce voluntary agreements but not redistribute income

Question 44

Libertarianism says...

Answer 44

1. Society itself doesn't have income 2. Only individuals earn income 3. Government shouldn't take from individuals to give to others 4. Equality of opportunity is more important that equality of incomes

Question 45

Policies to reduce poverty

Answer 45

1. Minimum-wage laws 2. Welfare 3. Income tax 4. Transfer payments