Unit 7 - Current & Future State Of The Economy

Question 1

What is the process of the world melding into one unit through the lowering of trade barriers?

Answer 1

Globalization

Question 2

The ______________________ is an estimate made by periodically collecting the prices of certain representative goods and services purchased by the typical household and then calculating the percent of change in those prices between different years.

Answer 2

consumer price index (CPI)

Question 3

What is the monetary value of all goods and services produced within a country’s borders over a specific period of time?

Answer 3

Gross Domestic Product (GDP)

Question 4

What is the most common method of estimating GDP, that states that everything spent by the private sector within the borders of a country must equal the value of all goods and services produced during the same period of time?

Answer 4

expenditure method

Question 5

What are the two types of GDP?

Answer 5

nominal and real GDP

Question 6

What is the definition of unemployment?

Answer 6

the situation where someone is looking for work but cannot find it.

Question 7

In 1994, the 124 nations in the GATT signed the Marrakesh Agreement in Morocco, which established the _______________________________.

Answer 7

World Trade Organization

Question 8

The rapid rise in ___________________________________ technologies has expanded the global market and created an interdependence between previously separate economies.

Answer 8

transportation and communication

Question 9

A(n) _________________ allows for its citizens to sell the products and services that they produce to other economies unhindered.

Answer 9

Open economy

Question 10

The comparison of the amount of exports against the amount of imports, over a certain period of time, represents a country’s _____________________.

Answer 10

balance of trade

Question 11

When the inflation rate rises quickly, it is known as __________________.

Answer 11

hyperinflation

Question 12

What is the common goal of the fiscal tools that the government can use to prevent a recession?

Answer 12

increase GDP

Question 13

The role of ______________ in circular flow helps to explain how the free market is imperfect even though it is an effective way of organizing the economy.

Answer 13

government

Question 14

What is the formula for calculating the expenditure method?

Answer 14

GDP = C + I + G + (EX - IM)

Question 15

What is economic growth?

Answer 15

change in GDP over a specific time span.

Question 16

What three main factors affect economic growth rates?

Answer 16

labor, capital stock, and technology

Question 17

What is the most commonly cited example of cyclical unemployment?

Answer 17

The Great Depression

Question 18

In 1994, what three countries struck the North American Free Trade Agreement (NAFTA) which sought to create a single free trade zone, or region where a group of countries agree to lower or eliminate trade barriers?

Answer 18

United States, Canada, and Mexico

Question 19

__________________ revolutionized global communication systems.

Answer 19

The Internet

Question 20

What is a ban on trade with a specific country?

Answer 20

Embargo