Imports, Exports & Exchange Rates
A country that sells more goods abroad than it buys from abroad has positive _____.
Net exports
In a market with many sellers and identical products, individual firms have little control over _____.
Price
The idea that self-interest can unintentionally benefit society is called the _____.
Invisible hand
Taxes are used by governments to fund public goods and _____.
Services
The total value of goods and services produced in a country is called _____.
GDP
A trade deficit occurs when imports are greater than _____.
Exports
A coffee shop like Starbucks has some pricing power mainly because of brand loyalty and product _____.
Differentiation
Keynesian economics argues that markets do not always self-correct quickly, so the government may need to use _____ policy.
Fiscal
A tax collected by businesses before being passed to the government is called a/an _____ tax.
Indirect
When money loses value because prices rise, consumers lose _____.
Purchasing power
A stronger currency can make a country’s exports more expensive for foreign buyers, which may reduce _____.
Demand for exports
In an oligopoly, firms closely watch each other’s decisions because they are highly _____.
Interdependent
Monetarists argue that the government should focus mainly on controlling the money _____.
Supply
A tax where lower-income people feel a larger burden, even if everyone pays the same rate, is called _____.
Regressive
A situation where one company controls an industry and faces little competition is called a _____.
If Country A can produce everything more efficiently than Country B, Ricardo would still argue both countries can benefit from trade because of _____.
Comparative advantage
Why do monopolies usually have more market power than firms in perfect competition?
Because they face little competition, have high barriers to entry, and can influence prices.
Which school of thought would most likely support cutting taxes and increasing government spending during a recession?
Keynesian economics
A luxury tax can create unintended consequences if it reduces demand and causes job losses in the affected _____.
Industry
When high inflation causes people to buy fewer goods with the same income, their real income has _____.
Decreased