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Econ Exam 3 > The US And World Trade > Flashcards

The US And World Trade Flashcards

1
Q

What is the basic concept that makes trade necessary between nations or within a nation?

A

Law of Comparative Advantage

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2
Q

When all nations have a different combination of resources economists call this an unequal __________ of productive resources.

A

Endowment

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3
Q

Developing one product over others is called what?

A

Specialization

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4
Q

Nations specialize in products made from the resources which are ___________ in the nation.

A

Abundant

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5
Q

In order for trade to occur, the surplus of goods must be priced ___________ than a potential trading partner can produce the product itself.

A

Cheaper

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6
Q

It is highly probable that a nation with an abundance of a resource is going to have a what?

A

Cost advantage

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7
Q

The basic advantage of trade is that scarce resources can be used to their best ____________. Which means efficiency.

A

Advantage

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8
Q

A second advantage of trade would be that the standard of living of both trading partners does what?

A

Increases

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9
Q

Attempts at self sufficiency commit scarce resources in ___________ production.

A

Insufficient

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10
Q

Buying inefficient production reduces what?

A

The standard of living

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11
Q

Trade between nations enhances __________ and standard of living.

A

Efficiency

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12
Q

Virtually every nation in the world has legislation that removes some ___________ from international trade.

A

Freedom

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13
Q

What is one of the most common type of barriers that restricts trade?

A

A tariff

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14
Q

What is an import tax on a good?

A

Tariff

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15
Q

Another trade barrier is an import _______.

A

Quota

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16
Q

What limits the number of goods entering a country?

A

Import Quota

17
Q

An extreme type of import quota is what?

A

An embargo

18
Q

An embargo stops ______ trade of a particular product.

A

All

19
Q

What exists when the process of securing the rights to import a product is so laborious businesses don’t bother?

A

Administrative barrier

20
Q

Trade barriers _________ the price of goods and services in the US.

A

Increase

21
Q

One reason we restrict trade is purely __________. If we don’t approve of a nation, we don’t trade with them.

A

Political

22
Q

The reason for trade barriers are not ___________ in the first place.

A

Economic

23
Q

A second justification for trade barriers is to restrict the flow of some goods in the US because they are dangerous to the _________ of our population.

A

Health

24
Q

A third justification for trade barriers is because we must always have the capability to maintain security through an adequate __________ System.

A

Defense

25
Q

To avoid problems of importing weapons, the US relies on domestic producers for what?

A

Military needs

26
Q

The forth justification for trade barriers is industry needs ____________.

A

Protection

27
Q

By protecting industry from cheaper imports, citizens are forced to pay higher prices reducing what?

A

Standard of living

28
Q

An industry in the very early development stages is considered what?

A

Infant industry

29
Q

Infant industry demands __________.

A

Protection

30
Q

The final justification for trade barriers most often used is to protect ______ in the US.

A

Jobs

31
Q

People prefer less expensive product in similar quality over __________ Product.

A

Domestic

32
Q

Another factor effecting the flow of trade is the value of the nations ___________.

A

Currency

33
Q

The stronger a currency is relative to another nations currency, the more _________ a nation has.

A

Imports

34
Q

A strong currency will reduce __________.

A

Exports

35
Q

As a nations currency weakens, exports will _____ but imports will ______.

A

Rise

Fall

36
Q

The Federal Reserve System cooperates with other central banks to regulate big swings in currency _______ so _______ can continue to flow.

A

Values

Trade

37
Q

What states that nations are able to produce some products cheaper than others due to unequal distribution of productive resources?

A

Law of Comparative Advantage

38
Q

Any legislation that obstructs a nation from exploiting its comparative advantage is a what?

A

Trade barrier

39
Q

The value of one nations currency in terms of another nations currency is what?

A

Exchange rates

Econ Exam 3 (14 decks)

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