Economics Unit 6

- the US limits the number of

computers brought into the country

Which is an example of a quota _____ .

- the US stops trade with China

- the US pays a high tax on the number of TV's brought into the country

- the US limits the number of

computers brought into the country

- None of the above

NAFTA

What would a free-trader most likely support?

-an embargo

-a revenue tariff

-NAFTA

- the infant industries argument

International trade with no artificial barriers such as tariffs and quotas

What is free trade?

-International trade with artificial barriers such as tariffs and quotas

-Trade that reflects the impact of specialization and currency exchange rates

-Domestic trade

- International trade with no artificial barriers such as tariffs and quotas

trade

the business of buying and selling or exchanging items

Consumers

Who typically ends up paying tariffs?

- The Federal Reserve

- Consumers

- The exporting company

- Congress

import

bring (goods or services) into a country from abroad for sale.

True

With trade, countries are able to consume beyond their Production Possibilities Curve (PPC).

Select one:

True

False

emerging

Which of the following is the best synonym for infant industries argument (an economic term)?

- traditional

- dependent

- youthful

- emerging

- The countries have different opportunity costs to produce each good.

The United States and China can both produce cars and computers. If both countries decide to specialize and trade, which of the following must be true?

- The opportunity costs to produce both goods must be the same.

- One country has an absolute advantage in cars while the other has an absolute advantage in computers.

- The countries have different opportunity costs to produce each good.

- One of the countries has an absolute advantage in producing both goods.

True

Quotas restrict trade.

Select one:

True

False

-Protectionists

People who want to shelter domestic producers from foreign competition with tariffs, quotas, and other trade barriers are referred to as _____ .

-World Traders

-Globalists

-Free Traders

-Protectionists

- NAFTA

What is the world's largest free trade area?

- WTO

- MFN

- NAFTA

- GATT

- decreases the chance of conflict because of economic advantages

According to economists, international trade among countries _____ .

- increases the chance of conflict because of competition

- decreases the chance of conflict because of floating exchange

- increases the chance of conflict because of economic rivalry

- decreases the chance of conflict because of economic advantages

- it can produce more of one good than the other country can

If a country has an absolute advantage over another country, _____ .

- it gives up more of one good to produce another good

- it can produce more of one good than the other country can

- it should not engage in international trade with the other country

- it gives up less of one good to produce another good

- comparative advantage

Countries will export goods and services they can produce at lower opportunity cost. This is called ____ .

- Monopoly

- Capitalism

- comparative advantage

- absolute advantage

- free traders

People who favor fewer or no trade restrictions are called _____ .

- free traders

- Protectors

- embargoists

- protectionists

imports

The goods and services that a nation buys from other nations are called _____ .

imports

quotas

exports

tariffs

A politician is worried about steel manufacturing in his district. As a result, he proposes a price floor on steel. What will most likely be the result?

- Better quality steel

- A surplus of steel

- No adverse effects

- A shortage of steel

- Absolute advantage

If I am faster at producing goods than you, then I have _____ in the production of goods.

- More workers

- More profit

- Comparative advantage

- Absolute advantage

= All of the above

The argument(s) against closed economies and government intervention is/are _____ .

- more of the planet's resources are used

- fewer benefits for less developed countries

- higher prices

= All of the above

- domestic industries

What does a protective tariff seek to protect?

- domestic industries

- free trade

- free trade

- revenue

England will produce more bread and France will produce more cheese.

England and France produce cheese and bread. England has a competitive advantage in cheese production. France has a competitive advantage in bread production. If England places a trade embargo on France, what is likely to happen with cheese and bread production in each country?

England will produce less bread and France will produce less cheese.

England will produce more cheese and France will produce more bread.

England will produce more cheese and France will produce less bread.

England will produce more bread and France will produce more cheese.

Tariff

A tax on imported goods

- all of the above

Why do nations trade?

- So they can specialize.

- Because they believe the products they receive are worth more than the products they give up.

- Because they need to acquire certain raw materials.

- all of the above

- countries must engage in trade to get the goods and services they need

Since resources are not evenly distributed across the planet, _____ .

- countries must engage in trade to get the goods and services they need

- global economic interdependence is decreasing

- most countries of the resources they need to survive

- most countries engage in the barter system

Foreign trade is limited to a minority of goods, and transportation is slow and dangerous. Most goods are produced locally.

Which of the following best describes Globalization 1.0?

- There is no trade, and all forms of economic activity are self-sufficient.

- Foreign trade is limited to a minority of goods, and transportation is slow and dangerous. Most goods are produced locally.

- Foreign trade is common, and it is easy to transport goods over vast distances in a short amount of time reliably.

- Information can move almost instantaneously; instead of goods being produced at a single location, free access to communication allows production to be split up into a global supply chain.

advancements in transportation

What primarily caused the shift from Globalization 1.0 to Globalization 2.0?

- advancements in business organization

- advancements in transportation

- advancements in communication

- advancements in political systems