Exam 4

A  a tariff raises the world price of a good

B  a tariff lowers the world price of a good

C  a tariff reduces tax revenue

D  a tariff increases the amount of imports

A  Italy has the absolute advantage in producing wine

B  Italy has the comparative advantage in producing cheese

C  France has the absolute advantage in producing cheese

D  Italy has the comparative advantage in producing wine

A  high

B  the same

C  rising

D  low

A  to have a greater variety of goods and service

B  to pay less for goods and services

C  to decrease domestic jobs

D  to protect domestic jobs

A  the government can make the economy recover faster

B  wages and prices adjust quickly

C  people are well off and do not need assistance

D  wages and prices are sticky

A  wages cannot adjust when the economy slows

B  inflation is too high

C  the government is slow to detect a recession

D  wages and prices are flexible

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  low income countries have high environmental standards

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

C  competition is beneficial

D  trade creates more jobs

A  wages and prices are sticky

B  the economy is past full employment

C  the economy is at full employment

D  wages and prices are flexible

A  produce a good or service at a lower opportunity cost

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

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

D  produce a good or service at a higher opportunity cost

A  the government can make the economy recover faster

B  the government works efficiently

C  fiscal policy is effective in fighting recessions

D  the economy will adjust on its own

A  an initial decrease 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 larger impact than the initial dollar amount spent

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

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

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

B  Indonesia has the comparative advantage in producing copper

C  Malaysia has the comparative advantage in producing fish

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

A  an increase in government spending

B  a decrease in interest rates

C  a decrease in net exports

D  a decrease in taxes

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

B  the government should focus on long term growth

C  the government should focus on reducing cyclical unemployment

D  the economy will fluctuate around its potential GDP

A  higher prices

B  specialization

C  more variety of goods and services

D  greater competition