Economics 1143 Self Test
Arguments expressed in favor of free trade includes ...
free trade increases total output, free trade encourages international competition, free trade generally benefits everyone, free trade encourages peace
The ... of the United States guarantees bank deposits through the FDIC and various bonds
government
A decrease in the trade deficit ... the income of the average worker
increases
A financial asset can be created as long as an offsetting financial ... is created at the same time
liability
Because the banking system can create ... so easily, it has the potential to create economic problems
money
A ... is a loan secured by real estate
mortgages
nation that is charged as low a tariff on exports as any other nation
most-favored nations
A ... exchange rate is sometimes controlled by the government and sometimes allowed to fluctuate
partially flexible
Arguments expressed in favor of trade restrictions include ...
protection of domestic industries and workers, protection of national security, increased revenue
limit placed on quantity of imported goods
quota
Governments impose trade ... to protect domestic interests
restrictions
An S&L is a .... institution
savings and loan
Trade between a large nation and small nation is more beneficial to the ... nation because trade opens up more opportunities for that nation
small
A nation runs a trade ... when the value of its imports is less than the value of its exports
surplus
Nations running a trade ... are able to lend money to other nations
surplus
tax placed on internationally traded goods
tariff
sale to a third party to avoid trade restrictions
transshipment
Adherence to international economic policies is purely ...
voluntary
The combined value of all transactions listed on a balance of payments account must equal ...
zero
EMU
European Monetary Union
... growth is based on a trade surplus, which stimulates income growth
Export-led
FDIC
Federal Deposit Insurance Corporation
issuer of U.S money
Federal Reserve Bank
... are the economists' three definitions of money
M1, M2, L
international organization dedicated to eliminating trade barriers
WTO
WTO
World Trade Organization
The value of a nation's imports is usually ... the value of its exports
about the same as
A nation that can produce a good at a lower cost than another nation has an ... advantage in the production of that good
absolute
Banks can create money because the ... deposited in a bank fluctuates very little from day to day
amount of money
a nation's record of all transactions between its residents and those of all foreign nations
balance of payments
difference between the value of goods a nation imports and the value of goods it exports
balance of trade
A ... market is a market of rising prices
bull
A ... asset offers a higher rate of return but is less liquid and takes more than one year to mature
capital market
A ... stock entails more risk, but it is less expensive and allows its holder to vote at stockholders' meetings
common
free-trade association among nations
common market
"As long as the relative opportunity costs of producing goods differ among nations, there are potential gains from trade, even if one nation has an absolute advantage in the production of everything" is the principle of ... advantage
comparative
... advantage is more common than ... advantage in international trade
comparative, absolute
a nation's ability to produce goods more inexpensively than other nations
competitiveness
The price of everything in an economy is dependent on the value of its ...
currency
On a balance of payment account ... are payments going out of the nation and are indicated with a ... sign
debits, minus
International trade declined during the Great Depression because of ...
decreased income, increased trade restrictions
A nation running a trade ... must receive foreign aid, borrow from other nations, or live on its savings
deficit
A ... exchange rate is always established by a government, but a ... exchange rate is based entirely on the currency market and is free of government intervention
fixed, flexible
A ... is a periodic payment made to stockholders, and a ... is an increase in the value of a stock
dividend, capital gain
All nations benefit if each produces and exports good in which it has the greatest relative ...
efficiency
complete restriction on imports or exports
embargo
the price of one currency on terms of another
exchange rate
Money serves as a medium of ..., a measure of ..., and a store of ...
exchange, value, wealth
The United States has run a trade ... since 1976
deficit
selling a good below cost in a foreign nation
dumping