Chapter 26

Question 1

exports

Answer 1

a good sold to another country

Question 2

a good sold to another country

Answer 2

exports

Question 3

imports

Answer 3

goods purchased from abroad

Question 4

goods purchased from abroad

Answer 4

imports

Question 5

comparative advantage

Answer 5

the ability of a country to produce a good at a lower cost than another country can

Question 6

the ability of a country to produce a good at a lower cost than another country can

Answer 6

comparative advantage

Question 7

tariff (or customs duty)

Answer 7

a tax on an imported good

Question 8

a tax on an imported good

Answer 8

tariff (or customs duty)

Question 9

quotas

Answer 9

limits on the amount of foreign goods imported

Question 10

limits on the amount of foreign goods imported

Answer 10

quotas

Question 11

free trade

Answer 11

convincing countries not to pass laws that block or limit trade

Question 12

free trade

Answer 12

convincing countries not to pass laws that block or limit trade

Question 13

European Union (EU)

Answer 13

an organization of independent European nations

Question 14

an organization of independent European nations

Answer 14

European Union (EU)

Question 15

North American Free Trade Agreement (NAFTA)

Answer 15

a pact signed in the 1990s between the United States, Canada, and Mexico;

made to eventually eliminate all barriers to trade among the three countries

Question 16

a pact signed in the 1990s between the United States, Canada, and Mexico;

made to eventually eliminate all barriers to trade among the three countries

Answer 16

North American Free Trade Agreement (NAFTA)

Question 17

World Trade Organization (WTO)

Answer 17

an international body which oversees trade among nations

it organizes negotiations about trade rules and provides help to countries trying to develop their economies

Question 18

an international body which oversees trade among nations

it organizes negotiations about trade rules and provides help to countries trying to develop their economies

Answer 18

World Trade Organization (WTO)

Question 19

exchange rate

Answer 19

what the price of your nation’s currency is in terms to another nation’s currency

Question 20

what the price of your nation’s currency is in terms to another nation’s currency

Answer 20

exchange rate

Question 21

balance of trade

Answer 21

the difference between the value of a nation’s exports and its imports

Question 22

the difference between the value of a nation’s exports and its imports

Answer 22

balance of trade

Question 23

trade deficit

Answer 23

whenever the value of the products it imports exceeds the value of the products it exports

Question 24

whenever the value of the products it imports exceeds the value of the products it exports

Answer 24

trade deficit

Question 25

trade surplus

Answer 25

whenever the value of its exports exceeds the value of its imports

Question 26

whenever the value of its exports exceeds the value of its imports

Answer 26

trade surplus

Question 27

market economy

Answer 27

-also called capitalism -private citizens - not the government - own the factors of production (natural resources, capital, labor, and entrepreneurship) -offers a high degree of individual freedom

Question 28

-also called capitalism -private citizens - not the government - own the factors of production (natural resources, capital, labor, and entrepreneurship) -offers a high degree of individual freedom

Answer 28

market economy

Question 29

per capita GDP

Answer 29

a rough measure of a nation's prosperity

Question 30

a rough measure of a nation's prosperity

Answer 30

per capita GDP

Question 31

command economy

Answer 31

-the individual has little, if any, influence over how the basic economy functions -the major economic decisions are made by the central government -also called a "controlled economy" -the term "communism" applies to command economies

Question 32

-the individual has little, if any, influence over how the basic economy functions -the major economic decisions are made by the central government -also called a "controlled economy" -the term "communism" applies to command economies

Answer 32

command economy

Question 33

socialism

Answer 33

the belief the means of production should be owned and controlled by society, either directly or through the government. -In this way, socialists felt that wealth would be distributed equally among all citizens

Question 34

the belief the means of production should be owned and controlled by society, either directly or through the government. -In this way, socialists felt that wealth would be distributed equally among all citizens

Answer 34

socialism

Question 35

communism

Answer 35

one class would evolve, property would all be held in common, and there would be no need for government

Question 36

one class would evolve, property would all be held in common, and there would be no need for government

Answer 36

communism

Question 37

mixed economy

Answer 37

combines basic elements of a pure market economy and a command economy

Question 38

combines basic elements of a pure market economy and a command economy

Answer 38

mixed economy

Question 39

developing countries

Answer 39

countries whose average per capita income is only a fraction of that in more industrialized countries

Question 40

countries whose average per capita income is only a fraction of that in more industrialized countries

Answer 40

developing countries

Question 41

traditional economies

Answer 41

in these systems, things are done "the way they have always been done" -economic decisions of what, how, and for whom to produce are based on custom or habit

Question 42

in these systems, things are done "the way they have always been done" -economic decisions of what, how, and for whom to produce are based on custom or habit

Answer 42

traditional economies

Question 43

International Monetary Fund (IMF)

Answer 43

offers advice and financial assistance on monetary and fiscal policy (The IMF might help a government in a developing country keep the value of its currency stable.)

Question 44

offers advice and financial assistance on monetary and fiscal policy (The IMF might help a government in a developing country keep the value of its currency stable.)

Answer 44

International Monetary Fund (IMF)

Question 45

World Bank

Answer 45

this organization gives loans and advice to countries as they try to improve their economies

Question 46

this organization gives loans and advice to countries as they try to improve their economies

Answer 46

World Bank