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International Trade
More International Trade
Federal Reserve System
Monetary Policy
Mystery
100
Why do we trade?
The distribution of resources in uneven. Efficient production of different goods requires different technologies or combination of resources . Products produced in different countries may differ in quality and other non-price attributes.
100
Name a way a government can restrict trade.
Protective tariffs Import Quotas Nontariff Barriers Export Subsidies
100
What are the parts of the Fed?
Federal Reserve Banks Federal Open Market Committee Board of Governors
100
What is token money?
Money where the intrinsic value is less than monetary/actual value
100
Is the Federall Reserve controlled by our government?
No
200
What flow would the building of a new factory in a different country be considered.
What is Capital and Labor (aka resource) Flow
200
What is the main reasoning behind specialization.
Comparative Advantage - the oppurtunity cost of producing different goods is different among different countries.
200
What states the assets and claims of a bank (“balances” the value of assets, which equal the value of claims)
A balance sheet
200
How does the Fed enact monetary policy (3 things they manipulate)?
Required Reserve Rate Discount Rate Open Market Operations
200
What is the good and services flow?
The trade of products between nations.
300
The selling of a product under equilibrium price in foreign markets.
What is dumping
300
The exchange rate also known as "pegged". One country's currency is pegged to another, and any discrepency is fixed using IMF loans.
What is Bretton Woods
300
What is a Money Market Mutual Fund?
A mutual fund that invests exclusively in high-yielding short-term securities, such as Treasury bills, large certificates of deposits, and commercial paper
300
When should the Fed encat a Tight Money policy.
Economic Growth (think uphill)
300
What is it called when banks can create more money by lending more than the available reserves on hand?
Fractional Reserve System
400
What is the Official Reserves Account
Currency (money) paid or recieved to balance out a balance sheet.
400
If the dollar price of the Yen falls, the international value of the dollar ________.
Rises
400
What is M2?
Currency and Checkable Deposits (M1) plus, savings deposits, MMDA's, time accounts and MMMF balances
400
What is the Money Multiplier?
The expansion of a nation’s money supply that results from banks being able to lend.
400
If the dollar value of Yen ____________, the international value of the daollar falls.
Rises
500
What are the flaws with the infant industry argument for trade restrinctions?
Too hard to define “infant industry” Tariffs will continue post-maturity
500
Name the direct effects of trade restriction.
Decline in consumption Increased Domestic Production Decline in Imports Tariff Revenue
500
Who makes up the FOMC?
includes the 7 governors plus 5 regional Fed presidents
500
What type of monetary policy lowers the interest rate and increases investment?
Easy Money Policy
500
If joe deposits $100,000 in a bank, what happens to their liabilities and assets (balance sheet).
The checkable deposits increase by $100,000 Their assets increase by the same amount, however most (if not all) excess reserves will be lent out, leaving the bank with only theire required reserves.