Economic Schools of Thought and

Imports, Exports, & Exchange Rates

100

A good sold to another country

Export

200

What are positive net exports (or a trade surplus)?

When a country’s exports exceed its imports.

300

Which country has the highest trade deficit and highest trade surplus?

1) China Highest trade surplus
2) United States Highest Trade Deficit

Economic Schools of Thought

100

What is the invisible hand?

This idea explains how individual self-interest can lead to socially optimal outcomes in markets.

200

What is the difference in views on government intervention between Keynesian and new classical economics?

One school supports active government intervention through fiscal policy, while the other argues government intervention is unnecessary because markets self-correct.

300

Which economic approach supports using fiscal policy to stabilize the economy?

Keynesian economics?