ECON REVIEW CH17
healthy beverage company makes drinks in the united states with fruit that is grown in several states. it experiences
US employment would increase
how does specialization affect employment patters?
by changing job availability in a country or region
how do trade and specialization affect employment?
by changing the types of jobs that are available
joe works for a large american company. because it is losing business to foreign imports, the company shut down the plant where joe works. no american factories need joe's job skills anymore. what could joe do to adjust to this change in employment trends?
can retrain relocate take a lower paying/less skilled job
what is one measure of a nations human capital?
educational level of the population
germany tries to keep the value of its currency constant against that of France. this means that the two countries practice a
fixed exchange rate system
what happens when a nation's currency depreciates?
its products become cheaper in other countries
trade barrier
keeps a foreign product or service from entering the country
the currency in great britain is the pound. and the price of a particular british car is 12,000 pounds. Suppose is exchange rate is .67 pounds per dollar. what is the price of the british car in the united states?
17,910.00
what is the law of comparative advantage?
a country is better off producing goods and services that it can produce efficiently
the bretton woods conference led directly to which of the following?
a fixed exchange rate system tied to US dollars
import
a good that is brought in from another country for sale
export
a good that is sent to another country for sale
import quota
a limit on the amount of a good allowed to come into a country
trade barrier
a means of preventing a foreign product or service from freely entering a nations territory
voluntary export restraint
a self imposed limitation on the number of products that are shipped to a particular country
tariff
a tax on imported goods
when a nation exports more than it imports, economists say it has
a trade surplus
comparative advantage
ability to produce a product more efficiently than another country
factors of production
all the resources used to make goods and services
what two continents account for almost half of all trade with the united states?
asia and north america
which of the following is the best argument in favor of free trade?
countries with the fewest trade barriers have the highest standard of living
the goal of the european union is to
create a single regional economy among its members
trade war
cutting off all trade with another country
depreciation
decrease in the value of a currency
balance of trade
difference between the value of a nations imports and exports
export
good or service sold to another country
appreciation
increase in the value of currency
infant industry
industry in the early stages of development
when economists say that a currency has become stronger, he or she means that
it can be exchanged for more of a foreign currency
which of the following is an argument in favor of protectionism?
it helps protect jobs
where does the united states stand as a participant in international trade?
it is a major importer and exporter
with a flexible exchange rate system, how is the exchange rate of a currency determined?
it is determined by supply and demand for each currency
import quota
limit the number of certain goods that can enter a country
the use of technology such as computers, telephones, and the internet means that money exchanges and other financial transactions can be
made instantaneously
what is one reason some nations are concerned about multinational corporations?
multinationals can sometimes gain excessive political power
to convert US dollars into another currency
multiply the number of dollars by the number of units of the other currency per dollar
what is a disadvantage of using trade barriers to protect US businesses?
other countries may raise tariffs on US goods
free trade zone
region where a group of countries agrees to reduce or end trade barriers
free trade zone
region without trade barriers
free trade
removal of trade barriers
with a flexible exchange rate system, the exchange rate between two countries is determined by
supply and demand
comparative advantage
the ability to produce a good at a lower opportunity cost than others
absolute advantage
the ability to produce more of a good with a given amount of resources
interdependence
the need that countries share for each other's resources, goods, services, labor, and knowledge
how would prices be affected if the exchange rate between Japan and the United States changed from 100 yen per dollar
the price of american goods would increase in Japan
how would prices be affected if the exchange rate between the united states and japan changed from $1 - 100 yen to $1 - 110 yen
the price of american goods would increase in japan
what is the biggest factor that leads a country to specialize in certain products?
the resources of the nation
protectionism
the use of trade barriers to shield industries from foreign competition
what is the goal of NAFTA?
to eliminate most trade barriers between canada, mexico, and US by 2009
why did protectionists support protective tariffs early in American history?
to protect infant industries
what is the relationship between specialization and trade?
trade allows countries to specialize in some goods and trade for others
a nation that imports more goods and services than it exports is said to have a
trade deficit
a cycle of trade barriers escalating between nations is known as a
trade war
protectionism
use of trade barriers to protect home industries
protectionism
use of trade barriers to protect home industries from foreign competitors
exchange rate
value of a nations currency compared with a foreign currency
balance of payments
value of all money exchanged between a company and the rest of the world
trade surplus
when a nations exports are greater than its imports
trade deficit
when a nations imports are greater than their exports