Econ Final Exam Unit 4

____________ means selling goods below their cost of production.

Dumping

________________________ is theoretically possible, even sensible: give an industry a short-term indirect subsidy through protection, and then reap the long-term economic benefits of having a vibrant healthy industry.

The infant industry argument

If the government for the state of Washington collects $65.8 billion in tax revenues in 2013 and total spending in the same year is $74.8 billion, the result will be:

a budget deficit.

If government policy allows a country's currency to be determined in the exchange rate market, then that currency will be subject to:

a floating exchange rate.

A tariff differs from a quota in that a tariff is:

a tax imposed on imports, whereas a quota is an absolute limit to the number of units of a good that can be imported.

One of the following groups is not participating in the foreign exchange markets. Which one?

an Iowa travel firm that arranges vacation tours for local seniors to Hawaii

A ______________________ is created each time the federal government spends more than it collects in taxes in a given year.

budget deficit

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

discretionary fiscal policy.

The infant industry argument for protectionism suggests that an industry must be protected in the early stages of its development so that:

domestic producers can attain the economies of scale to allow them to compete in world markets.

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

fiscal policies

Tariffs are taxes imposed on _________________.

imported products

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

If the Canadian dollar is strengthening, then:

it has appreciated in terms of other currencies.

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 Jane to pay $25,000 in taxes on annual income of $200,000 and Mary to pay $10,000 in tax on annual income of $100,000, then the tax policy is:

progressive.

For firms engaged in international trade, ____________________ can have an enormous effect on profits.

swings in exchange rates

If $1.00 U.S. bought $1.40 Canadian dollars in 2006 and in 2010 it bought $1.00 Canadian dollar, then;

the Canadian dollar appreciated against the U.S. dollar.

If 112 Japanese yen purchased $1.00 U.S. in 2008 and 83 Japanese yen purchased $1.00 U.S. in 2009, then:

the dollar depreciated against the yen.

If 20 Mexican pesos could buy $2.00 U.S. dollars in 2006 and $1 U.S. dollar in 2010, then:

the dollar strengthened against the peso.

A depreciating U.S. dollar is ________________ because it is worth ___________ in terms of other currencies.

weakening; less

In 2010, 1 Canadian dollar cost .56 British pounds and in 2012 it cost .63 British pounds. How much would 1 British pound purchase in Canadian dollars in 2010 and 2012?

2010: 1.79 dollars, 2012: 1.59 dollars

What do goods like gasoline, tobacco, and alcohol typically share in common?

They are all subject to government excise taxes.

A rule that every imported product must be opened by hand and inspected with a magnifying glass, by one of just three government inspectors available at any given time might be referred to as __________________

a non-tariff barrier

An import quota or tariff on French wine that raises the prices for wine will probably:

hurt domestic wine drinkers but help domestic wineries, which will gain from the higher prices.

If a country�s GDP decreases, but its debt 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

A ________________________________ is calculated as a flat percentage of income earned, regardless of level of income.

proportional tax

If Japan does not have a comparative advantage in producing rice, the consequences of adopting a Japanese policy reducing or eliminating imports of rice into the country would include:

the real incomes of Japanese rice producers would rise, but the real incomes of Japanese rice consumers would fall.

International trade is fundamentally a ________________________.

win-win situation

In 2010, $1.00 U.S. bought 8.24 Chinese yuan and in 2012 it bought 6.64 Chinese yuan. How many U.S. dollars could 1 Chinese yuan purchase in 2010 and 2012?

2010: .12 U.S. dollars; 2012: .15 U.S. dollars