1. Unit 5 Test Review Game: International Economics

2. Rules
First team to raise their dry erase board with the correct answer earns the point.
You can wager points if you are the first team to answer correctly.
First place= +5, Second place= +4, Third place= +3

3. Question 1
________ advantage means a country can produce MORE of a product than another country.

4. Absolute

5. Comparative advantage suggests that as long as two countries have different opportunity costs for producing similar goods, they can profit from ____________- focus on producing one of the goods and trade for the other

6. Specialization

7. Most trade takes place because of ______ advantage in the production of a good or service.

8. Comparative

9. ________ balance of trade is when a country exports more than it imports, bringing more money into the economy.

10. Favorable

11. Balance of payments is the value of all the money coming into a country, or net ______

12. exports

13. Free trade is international trade without government _____________.

14. restrictions

15. Governments can restrict trade with ________ that limit how much of a product is imported

16. quotas

17. If the United States goes to war with Russia and they refuse to trade with them, they would be placing an ________ on Russia.

18. embargo

19. Governments can raise the __________of goods coming into a country, meaning that the product has to meet specific guidelines in order to be allowed in and sold.

20. standards

21. If the U.S. placed a 50% ______ (tax) on all goods coming from China, then _____ from China would probably decline; a shortage would cause prices to rise.

22. Tariff; imports

23. Protectionists favor trade barriers because the barriers can protect __________ jobs.

24. domestic

25. __________ is a trade agreement that lowered barriers between the U. S
__________ is a trade agreement that lowered barriers between the U.S., Canada, and Mexico

26. NAFTA

27. The _______ establishes international trading rules and help resolve trade disputes between nations

28. WTO- World Trade Organization

29. ________ __________ are the value of one country’s currency in terms of another country’s currency.

30. Exchange rates

31. Currency _____ is a GAIN of value of country’s currency with respect to one or more foreign reference currencies.

32. appreciation

33. ___________ power parity can be BEST described as when the same product sells for the same amount of currency in different countries

34. Purchasing

35. A woman that quits her job in Orlando and moves to Atlanta would be an example of _______ unemployment.

36. Frictional

37. If the government spends $2 trillion but only collected $1 trillion in taxes, then they have a _________.

38. deficit

39. GDP is calculated by adding consumption, investments, government spending, and net _________.

40. exports

41. GDP per capita is a way of measuring the _____________ _____ _________ for the population of a country.

42. Standard of living

43. If the government lowers taxes, but increases spending, they will see a rise in the total national _______.

44. debt

45. A certified teacher cannot find a job at a school, therefore he works as a waiter to earn money. He is considered __________.

46. Underemployed

47. The labor force includes people that are __________ and those that are unemployed. You must be looking for a job to be considered unemployed and in the labor force!

48. Working (or employed)

49. The natural rate of unemployment is ____ percent.

50. 5

51. A life guard that gets let go at the end of the summer is an example of ________ unemployment.

52. Seasonal

53. The most common unemployment during a recession is ___________ unemployment.

54. Cyclical

55. If the economy peaks for too long and inflation rises, the government might ________ taxes to slow down consumer spending.

56. raise

57. _________ supply is the total of all goods and services being offered in a country.

58. Aggregate

59. _____ Gross Domestic Product (GDP) is a macroeconomic measure of the value of economic output adjusted for price changes

60. Real

61. _____ is the total dollar value of all goods and services produced in a country.

62. GDP

63. A consumer price index (CPI) measures changes in the price level of a ______ ______ of consumer goods and services purchased by households.

64. Market basket

65. Which of the following indicates that a nation’s economy is stable?
Unemployment is above 10%
GDP per capita ranks in the top 10 world-wide
Rate of inflation is above 20%

66. B- GDP per capita ranks in the top 10 world-wide

67. The government raises taxes on all its citizens, Aggregate demand will shift to the _________.

68. LEFT

69. John had to leave his job when his national guard unit got called up for active duty. John (IS, IS NOT) considered to be apart of the labor force.

70. IS NOT

71. The Federal Reserve carries out ________ policy which impacts the money supply in the economy.

72. monetary

73. The government fights high unemployment with ___________ fiscal policy.

74. Expansionary

75. If inflation is on the rise for an extended period of time, the government may use contractionary fiscal policy- __________ taxes, cut spending.

76. Increase

77. The ________ _______ is the central banking system of the United States.

78. Federal Reserve

79. If the FED (Federal Reserve) wants to combat high inflation, they could ________ interest rates to tighten the money supply.

80. Raise

81. If the FED wanted to try to pull the economy out of a recession, they could _______ reserve requirements that would allow banks to lend out more money.

82. lower

83. The height of the business cycle where prices increase is called the ______.

84. Peak

85. Extremely high inflation over a shorter period of time is known as _______.

86. hyperinflation

87. The point where the business cycle bottoms out is called the ________.

88. Trough

89. A period in which there is high unemployment and high inflation is known as ___________.

90. stagflation

91. A decline in overall prices is known as ___________.

92. Deflation

93. If the county spends money to build a new school, that is a ________ expenditure that counts toward GDP.

94. Government

95. If a factory buys new machines to produce more goods, that is considered an ________ that counts toward GDP.

96. investment

97. If a person goes to a thrift store to buy a shirt, then it (Does, Does Not) count toward GDP.

98. Does Not

99. The government changing their tax and spending policies is referred to as _________ policy.

100. Fiscal

101. If the rate of inflation overall is above 2% for one year, aggregate demand will shift to the _________.

102. LEFT

103. Demand of certain goods/services can be ________ if there is no substitute and consumers feel they need that product.

104. Inelastic

105. Demand of a good/service can be affected by non-price determinants such as a change in consumer tastes. If more people start buying Ralph Lauren clothing, the demand for Banana Republic may shift to the _______.

106. LEFT

107. The Federal Reserve is headed up by the ______ of __________.

108. Board of Governors

109. The Board of Governors and 5 of the Federal Reserve Bank Presidents make up the _______, the committee that votes on monetary policy.

110. F.O.M.C.

111. The FOMC of the Federal Reserve can buy or sell U. S
The FOMC of the Federal Reserve can buy or sell U.S. _______ to manipulate the money supply.

112. bonds

113. The FED has _____ districts across the United States.

114. 12

115. If the price of cars goes down, the ________ _________ of cars goes up.

116. Quantity demanded

117. If the price of motorcycles goes down, the __________ for cars goes down.

118. Demand

119. If the price of steel goes up, the _____ of cars goes down.

120. supply

121. If the price of steel goes down, the ________ _________ of steel goes down.

122. Quantity supplied

123. If the government sets a price floor above the equilibrium, then a _________ of that good/service is created.

124. surplus

125. The two main markets within the Circular Flow are the _______ market and product market.

126. Factor

127. The ________ is in the middle of the Circular flow because they set the rules for the market (mixed) economy.

128. Government

129. In the _________ market, businesses supply finished goods/services to households.

130. Product

131. In the ________ market, households provide the factors of production to businesses and businesses provide wages for the people’s labor.

132. factor

133. One of the four market structures includes a __________ in which there is only one supplier and no substitute for that good/service.

134. monopoly

135. __________ competition is a market in which there are many firms that are competing to sell a similar product. (example= clothing stores)

136. Monopolistic

137. An economic system in which there is some elements of a free market but has some government regulation is considered to be a _________ economy.

138. mixed

139. An economic system in which the government has complete control over the factors of production is a _________ economy.

140. command

141. If supply stays the same, and demand increases, the equilibrium price will go ________.

142. Up

143. The government should provide _______ goods/services that cannot be denied to anyone such as access to roads or military protection.

144. Public

145. The _______ _______ curve shows the opportunity cost for a country when they are producing capital goods and consumer goods at the same time.

146. Production Possibilities

147. The biggest economic issue we face is not having enough resources to get or make what we want, also known as _________.

148. Scarcity

149. Microeconomics is the study of economic decisions made by _________ and businesses.

150. Individuals (or people)

151. One example of government regulation would be the _______- an agency that limits the amount of pollution. (abbreviate your answer)

152. EPA- Environmental Protection Agency

153. A __________ tax is one that raises the tax rate on higher incomes.

154. progressive

155. A good credit score of 720 or higher should get you a _______ interest rate on a loan.

156. lower

157. Your payment for your insurance policy is known as your _________.

158. premium

159. If you get into a car accident, you will have to pay your _________ before the insurance company will cover the damage.

160. deductible

161. A risky investment that has potential for a high reward would be to invest in the ______ market.

162. stock

163. A type of savings account that offers a _______ interest rate for a specific period of time is known as a CD, or certificate of deposit.

164. higher

165. C in the factors of production stands for _________.

166. Capital

167. WIRP stands for wages, interest, rent, and __________.

168. profits

169. _________ cost for a business is the cost of producing an additional unit of that product.

170. marginal

171. _______ exchange is the act of buyers and sellers freely and willingly engaging in market transactions

172. Voluntary

173. ___________ leads to higher productivity
___________ leads to higher productivity. Example- Henry Ford assembly line

174. Specialization

175. Money is used as a _________ of exchange so people can buy goods/services in the market.

176. medium

177. The law of diminishing marginal _________ states that with each additional unit that you consume, you lose satisfaction.

178. utility

179. In economics, you want to make the best choice by “thinking on the ________”. If the marginal benefit outweighs the marginal cost, then the benefit should be obtained.

180. margin

181. Note cards are due on the day of the Milestone, which is ______.