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43 Cards in this Set

  • Front
  • Back
The spending by Americans while traveling in Europe best illustrates a:
financial flow
Trade Adjustment Assistance:
helps worker dislocated by international trade without erecting barriers that impede foreign trade.
NAFTA is an international accord that will eliminate all tariffs and quotas worldwide by the year 2025.
false
Which of the following nations is not a member of the European Union?
switzerland
The building of a production plant in China by an American firm best illustrates a(n):
resource flow
Since 1975, United States exports and imports have:
grown both absolutely and as a percentage of GDP.
Terms of trade of 1X=5Y will be acceptable to two countries that have domestic opportunity costs of 1X=4Y and 1X=1Y, respectively.
false
The purchase by an American firm of the right to produce a prescription drug patented in Germany best illustrates a:
goods and services flow
If incomes rise rapidly in the United States and U.S. preferences for foreign goods strengthen, we would expect:
the dollar to depreciate in value
The main problem posed by trade blocs for nonmember nations is that:
nonmembers face tariffs that member nations do not.
The United States, Japan, and the western European nations are the major international traders in terms of overall volume.
true
Which of the following sets of countries were among those admitted to the European Union in 2004?
Poland, Hungary, and the Czech Republic
Poland, Hungary, and the Czech Republic
demand for German marks.
The largest goods imports of the United States (in dollar volume) are
petroleum, automobiles, metals, and household appliances.
All else equal, depreciation of the Mexican peso relative to the U.S. dollar would make a trip by:
an American to Mexico less expensive.
Appreciation of the Mexican peso will:
make Mexico's exports more expensive and its imports less expensive.
The world's largest exporter (measured in total dollar volume) is:
germany
The World Trade Organization (WTO):
is the successor to GATT
When the dollar price of yen rises, the dollar appreciates in value relative to the yen
False
Which of the following has not been a facilitating factor in world trade?
import quotas
The Smoot-Hawley Act:
established very high tariffs on goods imported to the United States.
Higher rates of unemployment are linked with:
higher crime rates as the unemployed seek to replace lost income.
The amount of investment in an economy is ultimately limited by the amount of savings in that economy.
true
The business cycle is primarily concerned with changes in the level of overall prices over time.
false
Which of the following is an example of economic investment?
Nike buys a new machine that increases shoe production.
The business cycle reflects both short-run fluctuations in output and long-run economic growth.
true
shocks occur:
when expectations are unmet.
Kara's Kittens typically produces and sells at its optimal (lowest per-unit cost) level of 30 scratching posts per week. Kara's also maintains an inventory of 20 scratching posts. If prices are sticky and there is a positive demand shock this week resulting in demand for 40 scratching posts, we would expect Kara's to:
sell the additional scratching posts out of its inventory and rebuild the inventory later when a negative demand shock occurs.
In the very short run, demand shocks will tend to change the level of output but have little effect on prices.
true
Milk prices tend to be stickier than gasoline prices.
true
If an economy wants to increase its current level of investment, it must:
sacrifice current consumption
Any person without a job is considered to be unemployed.
false
In situations of sticky prices and negative demand shocks we would expect firms to:
build up inventories before reducing production.
Increasing investment in the present means forgoing future consumption.
false
Higher unemployment rates are linked with higher crime rates and higher rates of physical and mental illness.
true
Suppose that Toyota buys a factory previous owned by Chrysler Motors. Economists would:
not consider this to be an economic investment because no new capital is created through the purchase.
For an economy to increase investment, it must:
increase savings
demand shocks:
refer to unexpected changes in the desires of households and businesses to buy goods and services.
In making international comparisons of living standards using GDP, which of the following is not adjusted for in the calculation?
the quantity of resources available to the economy
Which of the following is an example of a supply shock?
A dramatic increase in energy prices increases production costs for firms in the economy.
What is the difference between financial investment and economic investment?
Financial investment refers to the purchase of assets for financial gain; economic investment refers to the purchase of newly created capital goods.
Which of the following is most closely related to recessions?
negative growth in output
The average number of months between price changes for gasoline is:
0.6