ECON 104 Chapter 5: Chapter 5 Review

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erinllama201

30 Oct 2014

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Answer: first, there are trade flows to provide goods and services. Second, there are resource flows of capital goods and labor (immigration). Fourth, there are financial flows of money to pay for imports and exports: what three factors have facilitated the rapid growth of international trade since world. Answer: improvements in transportation technology have been a major factor in reducing the cost of shipping products among nations. A second factor has been improved communication technology that allows buyers and sellers to obtain information easily and cheaply, and to complete transactions in a shorter time. Third, the general decline in tariffs among nations has made trade freer and has contributed to reductions in the consumer cost of purchasing imported products: explain the principle of comparative advantage in non-technical terms. Answer: if two nations do not have identical costs of production, then each nation should specialize in production of the good or goods which it can produce at the relatively lower cost.

Related Questions

With the heavy focus on trade with China, it may be surprising to discover that Canada is the USA's largest trading partner. Perhaps it is not the amount of trade between the US and China that is such a great concern as much as the growth of the trade, the corresponding imbalances, and China's currency valuations.

The yuan renminbi is the official currency of China. It has been historically fixed and controlled by the Chinese government, but that may be changing. As China becomes a greater global exporter and economic powerhouse, critics are claiming that the currency is being undervalued and manipulated in an attempt to protect domestic markets. There are additional levels of complexity impacting China as the nation must deal not only with the economic competition but also internal political and social pressures. As China continues to loosen capital controls, there is fear that the government may lose control of inflation and interest rates, thereby causing a great deal of labor and social unrest, while negatively impacting China's competitive advantages. There are currently platforms in place to increase the circulation of the yuan, but those platforms are currently limited and severely restricted.

China is a leader in international world trade, a major exporter, and currently holds the largest foreign exchange reserve in the world. The nation has one of the highest GDPs in the world and is increasing its economic power. Is it fair for China to fix its currency by undervaluing it on the market? How does keeping its exchange rate undervalued give it a favorable position in international trade? What about from the viewpoint of consumers?

Why is the Chinese government hesitant to open the yuan to market forces to determine its value (floating exchange rate) inside and outside of China?

We often talk about manufacturing and goods related to trade with China. What information can you find on trade in services between the two countries?

ochrecrow336

1. When markets fail, public policy can

a. do nothing to improve the situation

b. potentially remedy the problem and increase economic efficiency

c. always remedy the problem and increase economic efficiency

d. In theory, remedy the problem, but in practice, public policy has proven to be ineffective

2. An important factor in the decline of the US textile industry ever the past 100 or so years is

a. foreign competitors that can produce quality textile goods at low cost.

b. lower prices of goods that are substitutes for clothing

c. a decrease in Americans' demand for clothing, due to increased income and the fact that clothing is an inferior

d. the fact that the minimum wage in the US has failed to keep pace with the cost of living

3. Patterns of trade among nations are primarily determined by

a. cultural considerations.

b. political considerations

c. comparative advantage

d. differences in the income elasticity of demand among nations

4. A tax on an imported good is called a

a. quota

b. tariff

c. supply tax

d. trade tax

5. A quota is

a. a tax placed on imports.

b. a limit on the quantity of imports.

c. a tax on exports to other countries.

d. an excess of exports over imports.

6. A common argument in favor of restricting trade

a. concerns the strategy of bargaining.

b. is that efforts should be made to get new industries started.

c. emphasizes the belief that all countries should play by the same rules.

d. All of the above are correct.

7. Externalities are

a. side effects passed on to a party other than the buyers and sellers in the market.

b. side effects of government intervention in markets.

c. external forces that cause the price of a good to be higher than it otherwise would be.

d. external forces that help establish equilibrium price.

tariffa government tax on imports or exportsMore (Definitions, Synonyms, Translation)

maroonllama628

Today, in the Unitedâ States, exports are about

28 percent of GDP.

90 percent of GDP.

14 percent of GDP.

4 percent of GDP.

Which of the following statements isâ FALSE?

Sophisticated financial systems have given U.S. productive efficiency a boost.

When it comes to overall productiveâ efficiency, compared toâ Japan, Germany and the rest of the Europeanâ Union, the United States lags far behind.

Economic restructuring and investments in information technology have added to productive efficiency in the United States.

The Unitedâ States' international competitive position has been helped by its long history of widespread entrepreneurship.

One problem with the infant industry argument is that

it fails to protect domestic industries from foreign competition.

it must be approved by the Federal Reserve Board.

it must be approved by the IMF and the World Bank.

the protection is typically neverâ removed, creating a domestic monopoly.

When a tariff isâ imposed, the supply curve for the imported good

shifts upward and to the left.

shifts downward and to the right.

becomes perfectly inelastic.

does not change.

The WTO replaced the GATT in

1900.

1995.

1960.

1945.

The World Trade Organization

increases world trade by providing interest rate subsidies to foreign borrowers who buy U.S. exports on credit.

was established to settle trade disputes within the European Union.

was established to resolve disputes arising under world trade rules.

is another name for the IMF.

Trade deflection is an act that

has no impact on the amount of international trade in the world.

is illegal among all countries in the world.

decreases the amount of international trade in the world.

increases the amount of international trade in the world.

The Number of Worker Days to Produce One Cuckoo Clock or Movie Using All Available Resources
Product	United States â (WorkerminusââDays)	Switzerland â (WorkerminusââDays)
Cuckoo Clocks	8	6
Movies	12	4

Refer to the above table. Assuming constant opportunityâ costs, which of the of the following statements is correct if the rate of exchange is 1 movie for 1 cuckoo clock.

U.S. residents will gain from exporting movies and Swiss residents will gain from exporting cuckoo clocks at a rate of exchange.

U.S. residents would be willing to export cuckooâ clocks, but Swiss residents would not gain from exporting movies at this rate of exchange.

Swiss residents would be willing to exportâ movies, but U.S. residents would not gain from exporting cuckoo clocks at this rate of exchange.

U.S. residents will gain from exporting cuckoo clocks and Swiss residents will gain from exporting movies at a rate of exchange.

The balance of payments is

a summary record of aâ country's purchases and sales of goods and services in the world market.

a summary record of aâ country's economic transactions with foreign residents and governments.

the value of goods and services bought and sold in the world market.

the value of merchandise goods bought and sold in the world market.

indigowildebeest431

ECON 104 Chapter 5: Chapter 5 Review

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