Division of Labor and Specialization
This term describes how breaking a big job into smaller tasks makes production more efficient.
What is the division of labor?
When a country exports more than it imports.
What is a trade surplus?
When the value of a currency goes up
What is appreciation?
This is the name of the tariff passed in 1929 and make the Great Depression worse since it isolated Americans from international trade.
What is the Hawley-Smoot Tariff?
This is a government policy of reducing rules and restrictions on businesses, especially banks, which allowed riskier financial behavior.
What is deregulation?
These are the 3 Reasons Adam Smith said that the Division of Labor increases production
Saves time, you get better with practice, often invent new ways to do it better
Tax on Imported goods that are paid by Domestic Consumers
What is a Tariff?
When the value of a currency falls
What is depreciation?
This is when you take out a loan to buy shares of stock
What is "buying on the margin"?
This is the market that crashed and was the beginning of the Great Recession
What is the housing market?
This is when a country can produce more than another with the same resources.
What is Absolute Advantage?
When a country limits its own exports to other countries
What is a voluntary export restraint?
When a currency is "stronger" this is what happens to that country's Net Exports
It decreases.
This is what they did with Fiscal and Monetary policy during the Great Depression, which made it worse.
What is contractionary policies?
This protected people's deposits at banks in case banks went under.
What is FDIC insurance?
This is when a country can produce at a lower opportunity cost than another country.
What is a comparative advantage?
Stopping all trade with a certain country
What is an embargo?
I will import more from a country who has this value of currency?
What is weak/depreciated?
This is when people go to the bank and withdraw all their money and banks have less to loan, stalling the economy even more.
What is a Bank Run/Panic?
This is when loans are given to homebuyers with poor credit or little ability to repay.
What is a sub-prime mortgage?
David can make 6 pies or 4 Cakes.
William can make 4 pies or 2 Cakes.
This person has the Comparative Advantage in Cakes... Must show work
Who is David?
These are 2 effects of Trade Barriers
High prices, less competition, lower quality products, trade wars
This free trade zone shares a similar currency called the Euro?
What is the European Union?
This is the unemployment rate during the Great Depression
What is 25%?
This is the type of Fiscal and Monetary Policy that was used to help the US recover from the Great Recession more quickly
What are expansionary policies?