Macro Economics Final

Front 1

the term _______ refers to movements of goods, capital, and individuals.

Back 1

globalization

Front 2

_____ as a percentage of world income was about 5% in 1900. By 1914, _____ had risen to 20% of world income

Back 2

trade

Front 3

_______ ended this age of trade and protectionism and the Depression following the war did not allow for its increase.

Back 3

World War 1

Front 4

At the end of World War II, trade as a percentage of world income was about at the ____ level.

Back 4

1900

Front 5

The institutions set up by the _____ at the Bretton Woods conference in New Hampshire fostered a revival of trade, which has brought prosperity to many countries.

Back 5

Allies

Front 6

The institutions discussed at ____________ included the World Bank.

Back 6

Bretton Woods

Front 7

to provide development and reconstruction loans, and the _________ ____ _____, to provide assistance with Balance of Payments difficulties

Back 7

World Bank, International Monetary Fund

Front 8

Both of these institutions are based in Washington DC, with an __________ at the head of the World Bank and a _______ at the head of the IMF.

Back 8

American, European

Front 9

Also out of Bretton Woods was the series of dicussions that led to the general agreement on _______ and _______ (GATT). This has evolved into the World Trade Organization.

Back 9

tariffs and trade

Front 10

Trade is motivated by _______ _____. This means that a difference in opportunity costs leads to mutually beneficial trade.

Back 10

comparitive advantage

Front 11

The movement of people is an aspect of globalization. For the US, this has meant __________ ______. Earlier periods of immigration were high, also, with the largest before 1990 being the years from 1880-1924.

Back 11

large scale immigration

Front 12

Traditionally, economists have seen immigration as a ____ for the US. More human capital and labor move to this county.

Back 12

gain

Front 13

Some economists, notably ______ ______, have begun to question this view. Studies have estimated tax payments by immigrants as less than the value of tax financed benefits received by immigrants.

Back 13

George Borjas

Front 14

Borjas also points to _______ _____ decreases among lower skilled American workers and estimates that part of the decrease is explained by competition with lower skilled immigrants.

Back 14

relative wage decreases

Front 15

are another part of "globalization." These flows are discussed in the Balance of Payments chapters.

Back 15

capital flows

Front 16

One result of more rapid capital flows has been the sudden _________ of some nations currencies along with downturns int heir internal financial markets.

Back 16

depreciation

Front 17

in the mid 1990s, this environment in Latin America led to the _______ _______, which is an understanding between various Latin American governments on one side and the US Treasury, IMF, and World Bank on the other to promote import liberalization, privatization and deregulation in internal markets, and fiscal discipline.

Back 17

Washington Consensus

Front 18

free trade

Back 18

liberalization

Front 19

______ _____ countries are those that are reforming to allow markets to have greater sway in the allocation of resources.

Back 19

emerging market

Front 20

what are some countries rich and some not?

Back 20

look at their resources, especially capital and labor.

Front 21

Many developing and underdeveloped countries have problems with ______ _____ and ______ _____(for both financial capita).

Back 21

capital formation and capital flight

Front 22

is transferred to safer areas and skilled workers emigrate

Back 22

financial capital

Front 23

variations in _____ and other aspects of quality exist in lesser developed countries

Back 23

health

Front 24

was often seen as an impediment. However, US growth with rapid increases in population.

Back 24

rapid population growth

Front 25

______, which had been in favor of population control, has embarked on pro naturalist policies as they realize that human capital is essential to their continued prosperity

Back 25

Singapore

Front 26

Is the birth rate minus the death rate. In some developing countries, this rate of increase is high as death rates fall.

Back 26

natural rate of population increase

Front 27

in the 1950s and 1960s, many countries squandered _____ ________ with an orientation toward central planning.

Back 27

growth opportunities

Front 28

involves macroeconomics stabilization, deregulation of prices, privatization(to avoid tragedy of the commons).

Back 28

transition

Front 29

_____ _____ in Czech Republic and Poland was more successful than gradualism in many former Soviet Republics.

Back 29

"shock therapy"

Front 30

to compare development and growth, the UNDP publishes the ______ _____ _____

Back 30

Human Development Report

Front 31

This is a composite index that considers trade openness, government spending relative GDP, monetary policy, property rights, and regulation.

Back 31

index of economic freedom

Front 32

Countries that rate highly on this index like the US Hong Kong, Singapore, Australia, UK, Ireland, etc. are generally ____ ____ _______

Back 32

high income countries

Front 33

the ___ ______ shows how i and Y change with fiscal or monetary policy, as well as with changes in I or NX.

Back 33

IS-LM

Front 34

the __ curve shows the i Y combinations that correspond to equilibrium in the goods market.

Back 34

IS

Front 35

AE=Y

Back 35

equilibrium

Front 36

The IS curve has a ________ slope

Back 36

negative

Front 37

points to the right of the IS curve represent a ______ of goods(AE<Y). Inventories accumulate and N and Y will decrease as a result

Back 37

surplus

Front 38

the ___ ______ shows the i Y combinations that correspong to equilibrium in the money market.

Back 38

LM curve

Front 39

is a function of Y(if Y increases, money demand increases).

Back 39

money demand

Front 40

the LM curve has a _____ slope

Back 40

positive

Front 41

points to the right of the LM curve represent and therefore, bonds are liquidated, bond prices fall as a result, and interest rates increase, bringing the money market back into equilibrium.

Back 41

excess demand for money

Front 42

IS shifts right if a change occurs that will increase _ at any i. This type of change can be an increase in I, G, or Nx, or a decrease of T.

Back 42

Y

Front 43

The _____ graph shows that if expansionary fiscal policy is pursued, then IS shifts to the right. The new intersection with LM will be at a higher ineterest rate(i) and income level(Y).

Back 43

ISLM

Front 44

Both increased G and decreased T(components of the expansionary fiscal policy) shift IS to the ____, as will increased T or increased Nx.

Back 44

right

Front 45

An increase in ____ ____ will lower interest rates at any level of Y. This is shown with a shift to the _____ in the LM curve. ______ _______ _____ increases the money supply. With such a policy, the new intersection with the IS curve will be at a higher Y and a lower i.

Back 45

money supply, right, expansionary monetary policy