Economics Quiz/ Test

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 _________.

70-95 euros

Consequences of a Strong Dollar

A strong dollar helps importers and hurts exporters. Everyone buying or importing products made in other countries would be helped by a strong dollar, while the farmer who exports corn would be hurt.

Consequences of a weak dollar

A weak dollar helps exporters and hurts importers. Everyone buying or importing products made in other countries would be hurt by a weak dollar, while the company exporting automobiles to France would be helped.

Which of the following factors impact how much trade takes place between two countries? (choose all that apply)

All apply

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.

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

Comparative

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

EU

Short Answer: In one sentence, define the term globalization.

Globalization is the intergration of various people, businesses, and governments around the world.

Established in 1994, this treaty created a zone of free trade between Canada, Mexico, and the United States.

North American Free Trade Agreement (NAFTA )

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

Off- Shoring

When American companies send work to businesses or workers in other countries, it is called _________.

Outsourcing

Which of the following are disadvantages of franchises? (choose all that apply)

Owners have limited control over their business The owner must pay an expensive franchise fee

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

Shareholder

What effect do tariffs have on domestic producers?

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

What effect do tariffs have on labor productivity and wages?

Tariffs reduce labor productivity and reduce wages.

Hazlitt's arguments against tariffs are directed against which of the following fallacies? (choose all that apply)

That tariffs raise wages. That tariffs provide employment. That tariffs protect the American standard of living.

Which of the following are disadvantages of corporations? (choose all that apply)

Their owners are subjected to double taxation. They are more complicated and expensive to establish than other business structures.

Which of the following are disadvantages of sole proprietorships? (choose all that apply)

Their owners have unlimited personal liability. Their owners usually have limited funds.

Which of the following are advantages of cooperatives? (choose all that apply)

Their owners often get discounts on the goods and services produced by the cooperative. The owners have a say in how the business is run

Which of the following are advantages of sole proprietorships? (choose all that apply)

They are usually easy and inexpensive to start The owners have total control over their business The owners can keep al profits for themselves

What does Hazlitt say is the goal of economic science?

To see the problem as a whole and not in fragments

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

deficit

Hazlitt writes that the fundamental fallacy of looking only at certain groups instead of at everyone "is an almost inevitable result" of what?

division of labor

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

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

franchise

Which of the following are effects of the expansion of trade? (choose all that apply)

increases competition, which lowers prices and improves quality increases the variety of products available for consumers to purchase

specialization

occurs when a nation focuses its resources on producing goods that it expects to trade.

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

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

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

we are giving the goods away