6.17.F - Test: Business & Trade

Genesis 2:15 says, "The Lord God took the man and put him in the garden of Eden to ____ it and keep it."

work

Proverbs 19:15 says, "Slothfulness casts into a deep ______, and an idle person will suffer hunger."

sleep

What should you do when you reach the traditional retirement age of sixty-five?

You can quit your regular job if it's feasible, but you should continue working to advance God's kingdom as long as you're able.

Work is a(n) ______ from God.

gift

When do entrepreneurs earn a profit?

when they're able to sell their goods for more money than it cost them to produce those goods

In the United States, one in five small businesses fail within the first year. How many fail within the first five years?

one in two

Which of the following are ways that entrepreneurs benefit society? (choose all that apply)

fostering technological advancements

improving existing products

developing new products

generating economic growth

An individual who owns stock in a corporation is called a ____________.

shareholder

A business that operates as a separate legal entity from its owners is called a ___________.

corporation

A business owned by an entrepreneur that is licensed to sell products under the name of a larger corporation is called a ____________.

franchise

A business with two or more owners is called a _____________.

partnership

When we make a voluntary trade, we are exchanging one item for another because __________________.

we value the item acquired more than what we're giving up

If Country A can produce wheat at a lower cost than Country B, then Country A has a(n) ____________ advantage in wheat production.

absolute

What happens when all nations specialize in the areas in which they have comparative advantages? (choose all that apply)

the global standard of living increases

total world production increases

What is one key element that encourages people to trade?

the ability to buy a particular good from someone else cheaper than it costs to make it yourself

Which of the following are reasons that trade barriers are established? (choose all that apply)

to apply diplomatic pressure to a foreign government

to protect domestic industries that would be hurt by free trade

to strengthen national defense

When a nation imports more goods than it exports, it has a trade ________.

deficit

What is the chief consequence of trade barriers?

reduced competition

Who wrote in defense of free trade, "In every country it always is and must be the interest of the great body of the people to buy whatever they want of those who sell it cheapest"?

Adam Smith

What effect do tariffs have on domestic producers?

Tariffs help producers in the protected industries at the expense of all other domestic producers.

According to Hazlitt, which of the following would be consequences of the United States placing a new tariff on foreign sweaters, resulting in the creation of a domestic sweater industry? (choose all that apply)

American consumers would be forced to subsidize this industry.

There would be no net addition to American industry or employment.

One way that nations can control the value of their currency is through a ___________, in which the value of a currency is determined by the forces of supply and demand.

floating exchange rate

Which of the following would be hurt by a weak dollar? (choose all that apply)

an American traveling to Germany

an American company that buys steel from China

an American consumer buying products from England

​Historically, many countries used to fix their currency to a set amount of ______.

gold

Which of the following is a regional political and economic union that promotes trade by removing trade barriers and adopting a common currency?

EU

When American companies move production overseas, it is called ________.

offshoring

As of 2020, how many members are in the World Trade Organization?

164

Hazlitt quotes an essay by William Graham Sumner, in which A and B work together to propose laws that help X, who is suffering, but that these laws usually focus on what C will do for X. C is referred to as the ______________.

Forgotten Man

Hazlitt writes that "the economist, assigned a practical problem, must know both the essential facts of that problem and the valid __________ to be drawn from those facts."

deductions

Hazlitt writes that "a little economics can easily lead to . . . paradoxical and preposterous conclusions." What does he say about depth in economics?

It brings people back to common sense.

According to Hazlitt, what should be done to help those who are hurt by economic progress? What should not be done?

Hazlitt says that those who are helped by economic progress should use their gains to help those who are hurt by it, and that they should look at the others' problems in the context of the entire economy. The helpers should not, however, view other people's problems with a narrow mind or in fragments--they should view them as a whole.