Exam 4

A  a tariff increases the amount of imports

B  a tariff lowers the world price of a good

C  a tariff reduces tax revenue

D  a tariff raises the world price of a good

A  Italy has the comparative advantage in producing cheese

B  France has the absolute advantage in producing cheese

C  Italy has the absolute advantage in producing wine

D  Italy has the comparative advantage in producing wine

A  rising

B  low

C  the same

D  high

A  to pay less for goods and services

B  to protect domestic jobs

C  to decrease domestic jobs

D  to have a greater variety of goods and service

A  people are well off and do not need assistance

B  wages and prices adjust quickly

C  wages and prices are sticky

D  the government can make the economy recover faster

A  the government is slow to detect a recession

B  wages and prices are flexible

C  wages cannot adjust when the economy slows

D  inflation is too high

A  1 box of cheese = 2 bottles of wine

B  1 box of cheese = 10 bottles of wine

C  1 box of cheese = 5 bottles of wine

D  1 box of cheese = 4 bottles of wine

A  trade creates more jobs

B  low income countries have high environmental standards

C  they want nurture infant industries and protect them from foreign competition

D  competition is beneficial

A  wages and prices are flexible

B  wages and prices are sticky

C  the economy is at full employment

D  the economy is past full employment

A  produce a good or service using fewer resources than another country

B  produce a good or service using more resources than another country

C  produce a good or service at a higher opportunity cost

D  produce a good or service at a lower opportunity cost

A  fiscal policy is effective in fighting recessions

B  the government can make the economy recover faster

C  the economy will adjust on its own

D  the government works efficiently

A  an initial increase in spending, cycles repeatedly through the economy and has a larger impact than the initial dollar amount spent

B  an initial increase in spending, cycles repeatedly through the economy and has a smaller impact than the initial dollar amount spent

C  an initial increase in spending,  has no impact on the economy

D  an initial decrease in spending, cycles repeatedly through the economy and has a larger impact than the initial dollar amount spent

A  Indonesia has an absolute advantage in producing both fish and copper

B  Malaysia has an absolute advantage in producing both fish and copper

C  Indonesia has the comparative advantage in producing copper

D  Malaysia has the comparative advantage in producing fish

A  a decrease in taxes

B  a decrease in net exports

C  a decrease in interest rates

D  an increase in government spending

A  the economy will fluctuate around its potential GDP

B  the government should focus on reducing the natural rate of unemployment

C  the government should focus on reducing cyclical unemployment

D  the government should focus on long term growth

A  higher prices

B  specialization

C  greater competition

D  more variety of goods and services