Economics Unit 5 Flashcard

Unlock all answers in this set

Unlock answers
question
demand-pull is when prices rise as a result of demand while cost-push is when higher wages push prices up
answer
How does demand-pull inflation differ from cost-push inflation?
question
cyclical, structural, seasonal, and frictional
answer
What are the four types of unemployment?
question
excessive business and consumer demand
answer
What causes demand-pull inflation?
question
higher wages
answer
What causes cost-pull inflation?
question
when people deposit their income into savings accounts
answer
What are the leakages out of the circular flow of income and outcome?
question
investment, exports, and government spending
answer
What are the injections of income into the circular flow of income and output?
question
Milton Friedman
answer
Who is the economist that is often linked to monetarism?
question
it takes up about 15% of the GDP in the US
answer
How important is international trade?
question
it refers to the ability of a country to produce a particular good or service at a low cost
answer
How does a country determine whether it has a comparative advantage in the production of certain goods?
question
climates constantly change due to inflation and other factors
answer
Why was it difficult to maintain a system of fixed rates of exchange?
question
through tariffs, quotas, and embargoes
answer
How can a nation restrict imports?
question
revenue tariff is used to raise government revenue while protective tariff is used to raise the cost of imported goods
answer
What is the difference between a revenue tariff and a protective tariff?
question
low GDP per capital, emphasis on agriculture, poor health conditions, low literacy rates, and rapid population growth
answer
What are the five characteristics of developing nations?
question
Per Capita GDP
answer
What is the tool that economists often use as a rough measure of a nation's prosperity?
question
because of their low wage rates, few regulations, and abundant raw materials
answer
Why are foreign investors so attracted to developing nations?
question
it runs foreign assistance programs for the government
answer
What is the function of USAID?
question
-it encourages international trade -enhances the appeal of democracy and stops communism -to help protect the nations 's security
answer
What are three reasons for nations giving foreign aid to developing nations?
question
local traditions, rapid population growth, misuse of resources, and trade restrictions
answer
What are the four obstacles of growth?
question
US government securities, foreign exchange, and stocks
answer
What kinds of financial investments are traded in global markets?
question
the purchase of foreigners of real estate
answer
What is the United State's share of worldwide direct investment?
question
60,000
answer
How many multinationals exist in the world today?
question
complete restriction on the import or export of a particular good or goods going to or coming from a specific country
answer
What is an embargo?
question
North American Free Trade Agreement
answer
What does NAFTA stand for?
question
transactions by people who do not follow federal and state laws with respect to reporting earnings
answer
Underground company
question
combination of inflation and stagnation
answer
Stagflation
question
theory that deals with the relationship between the amount of money the Fed places in circulation and the level of activity in the economy
answer
Monetarism
question
lowering a currency's value in relation to other currencies by government order
answer
Devaluation
question
fall in the price of a currency through the actions of supply and demand
answer
Depreciation
question
restriction imposed on the number of units of a particular good that can be brought into the country
answer
Import quota
question
organization of European nations whose goal is to encourage economic integration as a single market
answer
European Union
question
the purchase by foreigners of real estate and businesses in other countries
answer
direct foreign investment (DFI)
question
branches of multinational firms
answer
foreign affiliates
Get an explanation on any task
Get unstuck with the help of our AI assistant in seconds
New