Economics & Pers Finance A – Global Economics

import To purchase products from other countries.
export To sell products to other countries.
quota A limit on the amount of a good that can be imported.
protectionism Act of guarding a country’s economic system.
free trade Trading with limited or no restrictions.
exchange rate The value of one nation’s currency compared to another.
The United States imports thousands of tons of sugar each year from Brazil. If the US placed a quota on importing sugar from Brazil, it would be __________. C. limiting the amount of Brazilian sugar that can be imported
Which of the following phrases BEST defines the term export? C. to send a product to another country
Which of the following phrases BEST defines the word import? B. to obtain a product from another country
Which of the following situations would encourage a country to import a good like computers? D. The country is unwilling or unable to produce computers domestically.
Trade barriers discourage consumers from buying imported goods because barriers can __________. D. increase the price of imports
When a country enters a free trade agreement, which of the following issues might be a problem they face? D. decline in some industries as jobs cross borders
Exchange rates show the value of one country’s currency in relation to other countries’__________. C. currencies
Countries create quotas and tariffs in order to increase the volume of trade with their neighbors. F
Which of the following results is NOT a way that trade can benefit all parties involved? D. Trade can keep countries from specializing in producing certain goods.
When countries create tariffs, they __________. C. set taxes on imported goods
Why are quotas an example of protectionism? C. Quotas create trade barriers by limiting imports.
NAFTA is a 1994 __________ between the United States, Mexico, and Canada. A. free trade agreement
Which of the following situations would most likely occur if the dollar’s exchange value dropped in relation to the Japanese yen? B. Imported Japanese goods would become more expensive.
Countries need the right resources to create products. Which of the following factors is NOT a resource that a country might need in order to produce something to trade? C. having a low standard of living
When the US dollar grows more valuable in relation to the euro, it has also grown more valuable in relation to every other currency. T
absolute advantage The ability to produce more of a given product using a given amount of resources.
comparative advantage The ability to produce a product at optimum efficiency given any other possible products that could be produced.
law of comparative advantage The idea that a nation is better off when it produces goods and services for which it has a comparative advantage.
export A good that is sent to another country for sale.
import Good or service bought from another country or region.
Since the 1980’s the value of U.S. imports has greatly exceeded exports, resulting in large trade deficits that complicated U.S. relations with its trading partners. All of the following are leading partners of the Unites States EXCEPT: d. England
List the five main activity patterns. producing, exchanging, consuming, saving, and investing
A country has an absolute advantage over its trading partners if it is able to produce more of a good or service with the same amount of resources or the same amount of a good or service with _______ resources. c. fewer
The ability to produce a product most efficiently given all the other products that could be produced a. comparative advantage
The ability to produce a product most efficiently given all the other products that could be produced is called comparative advantage.
A car made in Japan and sold in America would be considered an export from the point of view of the United States F
Good or service bought from another country or region. import
All of the following are aspects of human capital EXCEPT: b. man made goods
Ecuador has a comparative advantage in the production of bananas over the United States. Which of the following statements is true? c. Ecuador can produce bananas at a lower opportunity cost than the United States.
a good that is sent to another country for sale export
According to the law of comparative advantage, a country should c. specialize and export goods with the lowest opportunity cost.
Ed and Wendy decide to make extra money working at a local fair by painting names on coffee mugs and making sketches. Ed can paint 6 mugs or draw 2 sketches per hour. Wendy can paint 8 mugs or make 3 sketches per hour. Wendy has a. an absolute advantage over Ed.
is the ability to produce more of a given product using a given amount of resources absolute advantage
exchange rate The value of a foreign nation’s currency in terms of the home nation’s currency.
appreciation An increase in the value of a currency.
depreciation The loss of the value of capital equipment that results from normal wear and tear, or, a decrease in the value of a currency.
foreign exchange market The banks and other financial institutions that facilitate the buying and selling of foreign currencies.
fixed exchanged-rate system A currency system in which governments try to keep the values of their currencies constant against one another.
flexible exchange-rate system A currency system that allows the exchange rate to be determined by supply and demand.
trade surplus A trade surplus is the result of a nation exporting more than it imports.
trade deficit A trade deficit is a situation in which a country imports more than it exports.
balance of trade The relationship between a nation’s imports and exports.
When using a fixed exchange rate system, two governments may choose to make the values of their currencies ___________________. b. consistent with each another
Buying or selling foreign currency in order to profit from sudden changes in the rate of exchange is known as _______. a. arbitrage.
Suppose that there is a balance of trade in both the United States and Canada. Then, the U.S. dollar appreciates against the Canadian dollar. What would the likely outcome be? a. a trade surplus in the United States
Appreciation is a decrease in the value of currency. F
What happens when a nation’s currency depreciates? c. Its products become cheaper to other nations.
the result of a nation’s importing more than it exports trade deficit
What was the result of the Bretton Woods Conference? a. the creation of a fixed exchange-rate system for the United States and much of western Europe
A fixed exchange rate system is a currency system in which governments try to keep the values of their currencies constant against one another. T
economic interdependence Each person is dependent upon other people for certain things.
When a magazine reports that there has been a depreciation of the dollar, what does this mean? a. There has been a decrease in the value of what a dollar can buy of foreign products.
the value of a foreign nation’s currency in terms of the home nation’s currency exchange rate
What did the Bretton Woods Conference do? d. created a fixed exchange rate system between the United States and most of Europe.
In contrast to a fixed-rate system, what does a flexible exchange-rate system allow? d. The exchange rate is determined by supply and demand.
intermodal Characterized by a capability to be transported in multiple ways like air, water, land, etc.
fiber optics Pulses of light carried long distances along optical glass fibers.
globalization The rapid travel of ideas, cultures, goods, and information across national borders.
Westernization The process of acquiring Western characteristics.
Economic interdependence has helped the world become more globalized. T
The United States is not economically dependent on other countries for __________ because it specializes in producing them affordably. B. agricultural products
Increases in transportation time and shipping costs have caused trade to decrease. F
When using early sea and land trade routes like the Silk Road, traders often took __________ to bring products around the world. A. years
Specialization encourages countries to be economically interdependent. T
The costs of modern communication continue to decline because of __________. B. increased usage and competition
Some nations are hesitant to embrace globalization because of the resulting increased power of corporations.
All of the following are impacts of modern information technology EXCEPT: B. extremely fast communication
The long-distance trade between Polynesia’s islands is best described as an example of __________. B. economic interdependence
The American coffee shop in the picture above, located in China, is an example of the __________ of culture. C. Westernization
When Polynesia was settled, __________ became a key to survival because each island had different resources. A. long-distance trade
The creation of a worldwide marketplace is one advantage of globalization.
When countries lose their unique qualities as globalization takes place, it is best described as a loss of __________ . B. cultural diversity
Westernization is best described as the process of cultures being influenced by __________. D. European and American cultures
The shipping technology in the picture above helps companies use multiple methods of transport to help trade more goods internationally. This is refered to as __________. A. intermodal transport

Leave a Reply

Your email address will not be published. Required fields are marked *