ECON Chapters 17-20 - EXAM 4

If a country's economic data shows private savings of $300 million, government spending of $350 million, tax revenue of $400 million, and a trade surplus of $75 million, then what does investment equal?

$275 Million

When one nation can produce a product at a lower cost relative to another nation, it is said to have a(n) _______________ in producing that product.

Absolute Advantage

In what way is each and every one of the economies of the more than 200 countries of the world similar?

All have their own distinctive characteristics

When governments are borrowers in financial capital markets, which of the following is least likely to be possible source of the funds from a macroeconomic point of view?

Central bank prints more money

In _______________ , firms and workers often build upon or copy technologies and industries developed by the technology leaders.

China and India's converging economies

A government will likely ______________ to encourage investment in technology R&D by private firms?

Implement fiscal policy establishing tax incentives

If a nation has a comparative disadvantage in the production of some commodity:

It can still gain from international trade in that commodity, by getting it at a lower opportunity cost than if it produced it domestically

Intra-industry trade between similar trading partners allows the gains from _______________ that arise when firms and workers specialize in the production of a certain product.

Learning and Innovation

The reasons that nations trade includes the fact that:

No one country produces all of what citizens within the country want

If the quantity of financial capital supplied is equal to the quantity of financial capital demanded then, the national savings and investment identity is written as:

S + (M-X) = I +(G-T)

Some nations that seek to produce all of their own needs face the problem that:

Some industries are too small to be efficient if restricted to their domestic markets alone

What do Africa, southern Mexico, and tropical areas of Central America and Brazil all share in common?

Technological exclusion

Suppose that the USA can make 15,000,000 cars or 20,000,000 bottles of wine with one year's worth of labor. France can make 10,000,000 cars or 18,000,000 bottles of wine with one year's worth of labor. From these numbers, we can conclude:

The USA has an absolute advantage in the production of cars

When per capita GDP is used as a rough measure to compare the economic regions of the World, the richest region is _____________ and the poorest region is _____________ .

The United States, Western Europe and Japan; Sub-Saharn Africa

In the national savings and investment identity framework, and inflow of savings from abroad is, by definition, equal to:

The trade deficit

A ______________ often results in an outflow of financial capital leaving the domestic economy and being invested in the global economy?

Trade surplus

If the state of Washington's government collects $75 billion in tax revenues in 2013 and total spending in the same as $74.8 billion, the result will be a _____________________________ .

budget surplus

When the government passes a new law that explicitly changes overall tax or spending levels, it is enacting:

discretionary fiscal policy

When the share of individual income tax collected by the government from people with higher incomes is smaller than the share of tax collected from people with lower incomes, then the tax is __________________ .

regressive

Columbia produces coffee with less labor and land that any other country; it therefore necessarily has:

An absolute advantage in coffee production

The federal government levies ____________________ on people who pass assets _________________ , either after death or during life.

An estate and gift tax; to the next generation

If the U.S. economy is producing at a level that is substantially less than potential GDP and the government's budget deficits are increasing aggregate demand, the _______________ is not much of a danger.

An inflationary increase in the price level

If a government's budget deficits are increasing aggregate demand when the economy is already producing ear potential GDP, causing a threat of an inflationary increase in price levels, then the central bank may react with:

Contractionary Monetary Policy

Developing the means to increase human capital, and using existing technology to connect to the global economy are general associated with the growth policies of:

Converging nations

In 2010, Microsoft will pay corporate income tax to the federal government based on the company's ________________.

Corporate Profits

What name was given to South Korea, Thailand, Malaysia, Indonesia, Hong Kong and Taiwan because of their economic success?

East Asian tigers

By about 2050, the ______________ populations in ________________ are expected to boom.

Elderly; Low-income countries

The slope of the production possibility frontier is determined by the _______________ of expanding production of one good.

Opportunity Cost

A _______________________ policy will cause a greater share of income to be collected from those with high incomes than from those with lower incomes.

Progressive tax

If government tax policy requires Bill to pay $20,000 in taxes on annual income of $200,000 and Paul to pay $10,000 in tax on annual income of $100,000, then the tax policy is:

Proportional

If South Dakota's governor reports a budget surplus in 2011, that state government likely:

Received more in taxes than it spent in that year

When a business firm makes an investment in physical capital, what is that investment subject to?

The discipline of the market

When other factors such as health and illiteracy rates are added to global comparisons of GDP and population, which of the following is likely to be revealed?

Very wide differences in the standard of living

Which of the following terms is used to describe the set of policies that relate to government spending, taxation, and borrowing?

Fiscal Policies

If a country's GDP increases, but its debt also increases during that year, then the country's debt to GDP ratio for the year will ________ in proportion to the magnitude of the changes.

Increase or Decrease

A prolonged period of budget deficits may lead to ________________ .

Lower economic growth

Trade allows each country to take advantage of __________________ in the other country.

Lower opportunity costs

What do growth in standard of living, low unemployment, low inflation, and a sustainable balance of trade all share in common?

Main universal goals of macroeconomic policy

Countries have strong differences in economic institutions: the U.S. is extremely ____________, Cuba has a _______________ and Canada is a mixture of both.

Market-oriented; Command economy

The idea behind comparative advantage reflects the possibility that one party:

May be able to produce something at a lower opportunity cost than another party