This type of trade is based on comparative advantage and allows for more efficient allocation of resources and greater prosperity.
What is (international) free trade?
100
A barrier to trade is imposed in order to favor these goods and services, as opposed to global goods and services.
What are domestic goods and services?
100
This account deals with the overseas flow of money and international investment and loans.
What is the capital account?
100
This is the price of one currency relative to another.
What is an exchange rate?
100
To increase the value of the dollar, the government should do this to spending.
What is increase government spending?
200
This economic term states that nations can mutually benefit from trade as long as the relative production costs differ.
What is the law of comparative advantage?
200
With this device, the government pays exporters to decrease the price of their goods.
What is an export subsidy?
200
The current account can be classified as the international trade of these.
What are goods and services?
200
The dollar does this when it increases in value.
What is appreciate?
300
Guns Butter
U.S. 20 10
Japan 8 8
This country has the comparative advantage in guns.
What is the United States?
300
This barrier equally handicaps everyone and favors the most productive.
What are tariffs?
300
A transaction involving an American consumer purchasing a Japanese automobile.
What is a debit item?
300
This will increase when Americans purchase British goods and services.
What is the supply of dollars?
300
The Fed should execute this open market operation in order to increase the value of the dollar.
What is selling bonds?
400
Guns Butter
U.S. 20 10
Japan 8 8
This country should specialize in butter.
What is Japan?
400
DAILY DOUBLE
These are the four main arguments used against free trade.
What are national defense, infant industry, preservation of domestic jobs and wages, and foreign exploitation?
400
The type of trade when the United States pays for a new embassy in Sweden and renovations for a military base in Saudi Arabia.
What is invisible trade?
400
This determinate for exchange rate accounts for the likes and dislikes of consumers.
What is consumer taste?
400
Increasing government spending and decreasing taxes does this to net exports.
What is a decrease in net exports?
500
The United States will do this if the Mexican price of oranges is less than the U.S. price of oranges.
What is import?
500
Tariffs cause profits to go to government revenues, as opposed to these barriers, in which the profits go to the producers.
What are quotas?
500
Name one short term correction for a balance of payments deficit.
What is increasing interest rates to attract foreign investors, instituting exchange controls, borrowing foreign currency, or imposing tariffs and import quotas?
500
The appreciation of the dollar does this to the net exports of the United States.
What is decreases?
500
A U.S. construction company is building an industrial complex in Mexico. As a result, this will happen to the Canadian dollar.
What is an increase in value of the Canadian dollar?