econ mod 6
As of 2020, how many members are in the World Trade Organization?
164
Which verses say, "Whatever you do, work heartily, as for the Lord and not for men, knowing that from the Lord you will receive the inheritance as your reward. You are serving the Lord Christ"?
Colossians 3:23-24
Which verse says, "There is nothing better for a person than that he should eat and drink and find enjoyment in his toil"?
Ecclesiastes 2:24
____________ occurs when a nation focuses its resources on producing goods that it expects to trade.
Specialization
A limit on the quantity of a product that's allowed into a nation is called a(n) _______. a) quota b) export c) tariff d) embargo
a
Established in 1994, this treaty created a zone of free trade between Canada, Mexico, and the United States. a) NAFTA b) EU c) WTO d) USMCA
a
Hazlitt writes that "a little economics can easily lead to . . . paradoxical and preposterous conclusions." What does he say about depth in economics? a) It brings people back to common sense. b) It leads to even more preposterous conclusions. c) It cannot be achieved by looking at all the consequences of a policy. d) It consists of only looking at consequences that are immediately visible.
a
Historically, many countries used to fix their currency to a set amount of ______. a) gold b) steel c) land d) oil
a
In Nearing Home, Billy Graham writes that "someone who brags about working seventy or eighty hours a week" has become a(n) ________ of his or her job. a) slave b) beneficiary c) master d) expert
a
In the United States, how many small businesses fail within the first year? a) one in five b) one in four c) one in three d) one in two
a
In the United States, one in five small businesses fail within the first year. How many fail within the first five years? a) one in two b) one in three c) two in three d) one in four
a
In the past, the United States has been so focused on exporting goods that it gave other nations loans to pay for the goods America exported to them. But if these loans are never repaid, it means that _____________. a) we are giving the goods away b) we must threaten them with military force c) we can pay our nation's workers higher wages d) we are still wealthier because we've increased production
a
The interaction and integration of individuals, businesses, and governments worldwide is called _____________. a) globalization b) specialization c) internationalization d) interactionalization
a
What effect do tariffs have on domestic producers? a) Tariffs help producers in the protected industries at the expense of all other domestic producers. b) Tariffs hurt producers in the protected industries but help all other domestic producers. c) Tariffs help producers in every industry. d) Tariffs hurt producers in every industry.
a
Which of the following can discourage the creation of new businesses? a) high tax rates b) low interest rates c) investment tax credits d) high consumer demand
a
Which of the following is a trade barrier that forbids buying and selling a certain good with a certain country? a) embargo b) quota c) tariff d) export
a
Which of the following would be hurt by a strong dollar? (choose all that apply) a) an American farmer who exports corn to the Middle East b) an American traveling to Spain c) an American consumer buying products from China d) an American business that imports automobiles from Japan
a
Which verse says, "In the same way, let your light shine before others, so that they may see your good works and give glory to your Father who is in heaven"? a) Matthew 5:16 b) 2 Thessalonians 3:12 c) Mark 8:14 d) Hebrews 2:9
a
What happens when all nations specialize in the areas where they have comparative advantages? (choose all that apply) a) total world production increases b) the global standard of living increases c) some nations benefit and others suffer d) the world's total opportunity cost increases
a b
Which of the following are challenges for entrepreneurs? (choose all that apply) a) high financial commitment b) high time commitment c) high levels of stress d) low independence
a b c
Which of the following would be hurt by a weak dollar? (choose all that apply) a) an American traveling to Germany b) an American company that buys steel from China c) an American consumer buying products from England d) an American company that sells automobiles to France
a b c
Which of the following are effects of the expansion of trade? (choose all that apply) a) increases the variety of products available for consumers to purchase b) increases competition, which lowers prices and improves quality c) increases employment in industries that export goods to other nations d) generates economic growth and encourages investment
a b c d
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) a) American consumers would be forced to subsidize this industry. b) Foreign producers would earn greater profits at the expense of domestic producers. c) There would be no net addition to American industry or employment. d) Total production in America would rise due to the creation of the new industry.
a c
The United States has free trade agreements with which of the following nations? (choose all that apply) a) Canada b) Japan c) Mexico d) Morocco
a c d
Which of the following are reasons that trade barriers are established? (choose all that apply) a) to strengthen national defense b) to prevent domestic monopolies c) to apply diplomatic pressure to a foreign government d) to protect domestic industries that would be hurt by free trade
a c d
If a lot of Americans are buying products made in Europe, which of the following will happen? (choose all that apply) a) The supply of American dollars on the foreign exchange market will increase. b) The supply of euros on the foreign exchange market will increase. c) Demand for American dollars on the foreign exchange market will increase. d) Demand for euros on the foreign exchange market will increase.
a d
Which of the following are advantages of corporations? (choose all that apply) a) They can access an enormous amount of money they can invest. b) They are easy and inexpensive to start. c) Their owners don't have to pay any special business taxes. d) Their owners have limited liability.
a d
Which of the following are disadvantages of sole proprietorships? (choose all that apply) a) Their owners have unlimited personal liability. b) Their owners have limited control over the business. c) They are difficult and expensive to start. d) Their owners usually have limited financial resources.
a d
In Economics in One Lesson, Hazlitt talks about what would happen if a tariff that had brought an industry into existence was repealed. What does Hazlitt say the results would be? (choose all that apply) a) Employment on net balance would NOT go down. b) Production on net balance would go up. c) Domestic manufacturers in that industry would go out of business, and many workers would lose their jobs. d) Products in that industry would become less expensive or higher quality.
all
Which of the following factors impact how much trade takes place between two countries? (choose all that apply) a) the countries' willingness to encourage or discourage trade b) the exchange rate between their currencies c) each country's capacity to produce goods d) the political climate in each country e) the size of each country f) transportation costs
all
Because of ________________, the world's nations have becoming increasingly interdependent economically. a) increased trade deficits b) increased specialization c) increased trade barriers d) increased conflict
b
From 2009 to 2020, the exchange rate between the euro and the US dollar varied. During that time, the number of euros you would've received for $100 ranged from _________. a) 50 to 125 euros b) 70 to 95 euros c) 80 to 90 euros d) 95 to 100 euros
b
One way that nations can control the value of their currency is by establishing a ____________, in which the value of a currency is set at a specific value relative to another currency or some other measure of value. a) floating exchange rate b) fixed exchange rate c) pegged monetary rate d) variable monetary rate
b
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. a) pegged monetary rate b) floating exchange rate c) variable monetary rate d) fixed exchange rate
b
Owners of sole proprietorships and partnerships have _____________ liability for their business. a) limited personal b) unlimited personal
b
Which of the following agreements was negotiated during President Trump's administration and contains provisions that benefit American farmers, protect intellectual property, and regulate digital trade? a) NAFTA b) USMCA c) WTO d) EU
b
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"? a) John Maynard Keynes b) Adam Smith c) Carl Menger d) Ludwig von Mises
b
Which of the following are true about the impact of entrepreneurship on society? (choose all that apply) a) entrepreneurship leads to higher prices b) entrepreneurship increases competition c) entrepreneurship decreases competition d) entrepreneurship leads to higher quality goods
b d
An individual who owns stock in a corporation is called a ____________. a) partner b) franchisee c) shareholder d) corporate executive
c
Hazlitt says that, like mathematics, the answer to an economics problem __________________. a) is never completely certain b) always involves unknown variables c) already lies in the statement of the problem d) can only be understood by those who are good with numbers
c
What effect do tariffs have on labor productivity and wages? a) Tariffs reduce labor productivity but increase wages. b) Tariffs increase labor productivity but reduce wages. c) Tariffs reduce labor productivity and reduce wages. d) Tariffs increase labor productivity and increase wages.
c
What is one key element that encourages people to trade? a) the ability to buy lower quality goods from someone else than if you made it yourself b) the ability to pay a high tariff when trading a good to another country c) the ability to buy a particular good from someone else cheaper than it costs to make it yourself d) the ability to pay higher shipping costs on goods received from another country
c
When a country determines its areas of comparative advantage and specialization, it puts itself in a position to ____________ through trade with other countries. a) reduce its production b) increase its independence c) strengthen its economy d) weaken its military
c
When do entrepreneurs earn a profit? a) when they have more human capital than their competitors b) when they work harder than anyone else c) when they're able to sell their goods for more money than it cost them to produce those goods d) when their production costs are higher than the prices they sell their products for
c
Which of the following is an example of a cooperative? a) Medicare b) Federal Reserve System c) credit union d) partnership
c
Which verse says, "If anyone is not willing to work, let him not eat"? a) Ecclesiastes 2:24 b) 1 Corinthians 10:31 c) 2 Thessalonians 3:10 d) Galatians 1:15
c
Why do politicians often establish trade barriers even though the barriers usually do more harm than good? a) They do not have a basic understanding of the economic consequences of establishing trade barriers. b) They have no desire to get reelected, so they don't care about what citizens think of their policies. c) They are incentivized to create policies that disperse costs over a large number of people but benefit small, powerful groups. d) They receive bribes from foreign agents in exchange for establishing trade barriers between their countries.
c
What happens when all nations specialize in the areas in which they have comparative advantages? (choose all that apply) a) some nations benefit, and others suffer b) the world's total opportunity cost increases c) the global standard of living increases d) total world production increases
c d
A business that operates as a separate legal entity from its owners is called a ___________. a) franchise b) cooperative c) legal proprietorship d) corporation
d
Entrepreneurs develop new products and start new businesses by ________________. a) avoiding the government b) avoiding risks c) being more successful than their former employers d) bringing natural, human, and capital resources together
d
Hazlitt compares economics to both mathematics and ___________. a) history b) science c) language d) engineering
d
Hazlitt writes that economics should be concerned "not only [with] some special interest in the short run, but [with] the _________ interest in the long run." a) producers' b) consumers' d) government's d) general
d
In the video about entrepreneurship, how was the owner of Clean & Mean able to craft her work schedule in a way that allowed her to go to the mall with her mom on Friday mornings? a) Because her boss allowed her to take the day off. b) Because she was too stressed out to continue working. c) Because the business was doing poorly, and she had few clients. d) Because of the level of independence offered by entrepreneurship.
d
What does Hazlitt say is the goal of economic science? a) to limit government intervention in the economy b) to ensure everyone makes an equal income c) to provide full employment for all workers d) to see the problem as a whole, and not in fragments
d
What is the chief consequence of trade barriers? a) wealthier consumers b) reduced unemployment c) increased production d) reduced competition
d
When American companies send work to businesses or workers in other countries, it is called _________. a) offshoring b) globalization c) specialization d) outsourcing
d
When we make a voluntary trade, we are exchanging one item for another because __________________. a) we don't have any other choice b) we have nothing better to do with our time c) we are too lazy to make the item ourselves d) we value the item acquired more than what we're giving up
d
Which of the following is a regional political and economic union that promotes trade by removing trade barriers and adopting a common currency? a) USMCA b) WTO c) NAFTA d) EU
d
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
Individuals who take risks to bring natural, human, and capital resources together, in order to develop new products and start new businesses are called ______________.
entrepreneurs
A business owned by an entrepreneur that is licensed to sell products under the name of a larger corporation is called a ____________.
franchise
An agreement between business partners that outlines each partner's privileges and responsibilities is known as a ____________ agreement.
partnership
In his discussion of economic problem solving, Hazlitt quotes philosopher George Santayana, who wrote that logic "traces the _________ of truth."
radiation
Proverbs 19:15 says, "Slothfulness casts into a deep ______, and an idle person will suffer hunger."
sleep
Because of increased __________, the world's nations have becoming increasingly interdependent economically.
specialization
In Adam Smith's theories, free trade was considered to be one aspect of the __________ of labor.
specialization
Hazlitt writes, "The effect of a tariff, therefore, is to change the ____________ of American production" because it makes some industries larger and others smaller.
structure
When a nation exports more goods than it imports, it has a trade ________.
surplus
Ecclesiastes 2:24 says, "There is nothing better for a person than that he should eat and drink and find enjoyment in his ____."
toil
If the US dollar has a low value relative to other countries, it's said to be ________.
weak
Genesis 2:15 says, "The Lord God took the man and put him in the garden of Eden to ____ it and keep it."
work