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Economy > Test 9 > Flashcards

Test 9 Flashcards

1
Q

Exports

A

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

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2
Q

Balance of Trade

A

A comparison of the nations imports and exports

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3
Q

Trade Surplus

A

When your exports exceed your imports

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4
Q

Trade Deficit

A

When your imports exceed your exports

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5
Q

Absolute Advantage

A

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

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6
Q

Comparative Advantage

A

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

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7
Q

Barriers to Trade

A
  1. Tariff
  2. Quotas
  3. Export Subsidy
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8
Q

Tariff

A

Tax on imported goods

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9
Q

Types of Tariffs

A
  1. Revenue Tariff

2. Protective Tariff

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10
Q

Revenue Tariff Purpose

A

To raise money for the government

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11
Q

Protective Tariff Purpose

A

To protect domestic industry from foreign competition

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12
Q

Quotas

A

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

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13
Q

Export Subsidy

A

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

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14
Q

Why do nations restrict international trade?

A
  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
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15
Q

Free Trade

A

The absence of any form of government interference in international trade

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16
Q

Free Trade Assosiation

A

An agreement between countries to remove the barriers of trade

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17
Q

Customs Union

A

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

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18
Q

Imports

A

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

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19
Q

Major Agriculture Programs

A
  1. Set Aside Program
  2. Acreage Allotments
  3. Government Disposal of Surplus Crops
20
Q

Set Aside Program

A

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

21
Q

Acreage Allotments

A

Allocates an acreage base to a farm involuntarily

22
Q

Government disposes of surplus crops

A

The Government buys surplus crops and then destroys it

23
Q

Determinants of Equilibrium of Wages

A
  1. Compensation Differentials
  2. Human Capital
  3. Ability, Effort, and Chance
  4. Signaling
24
Q

Compensating Differentials

A

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

25
Q

Human Capital

A

The accumulation of investments in people

26
Q

Ability, Effort, and Chance

A

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

27
Q

Signaling

A

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

28
Q

Signaling Example

A

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

29
Q

Discrimination

A

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

30
Q

Poverty Rate

A

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

31
Q

Poverty Line

A

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

32
Q

Government Programs to Help Poverty

A
  1. Food stamps
  2. Housing vouchers
  3. Obamacare/Medicaid
33
Q

Life Cycle

A

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

34
Q

What Age Does the Average Americans Income Peak?

A

50

35
Q

How many people are below the Poverty Line?

A

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

36
Q

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

A

4 out of 5

37
Q

Utilitarianism

A

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

38
Q

Who started Utilitarianism

A

Jeremy Bentham and John Stuart Mill

39
Q

What is the goal of Utilitarianism

A

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

40
Q

Utility

A

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

41
Q

Liberalism

A
  1. Society’s institutions, laws, and policies must be just

2. Can we objectively determine what a just society should be?

42
Q

What novel is under Liberalism?

A

John Rawls A Theory of Justice

43
Q

Libertarianism

A

The political philosophy according to which the

government should punish crimes and enforce voluntary agreements but not redistribute income

44
Q

Libertarianism says…

A
  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
45
Q

Policies to reduce poverty

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

Economy (8 decks)

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