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Flashcards in Module 42 Misc. Deck (41)
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1

What is the effect when a foreign competitor's currency becomes weaker compared to the U.S. dollar?

The foreign company will have an advantage in the U.S. market.

2

____ are government investments funded by foreign currency reserves that are managed separately from official currency reserves and invested for profit.

Sovereign Wealth Funds (SWFs)

3

________ is all income received by individuals whether earned or unearned and is computed before any deductions for personal income taxes.

Personal Income

4

_______ includes all income by American-used resources whether used/invested at home or abroad.

National Income

5

A city ordinance that freezes rent prices may cause:

Demand for rental space to exceed Supply

6

A(n) ____ competitive firm has a large number of small competitors

Monopolistic

7

A(n) ____ firm must deal with the issue of interdependence between the small number of large firms in the industry.

Oligopolistic

8

The dominant reason why countries devalue their currencies is to:

improve the balance of trade.

9

One of the key characteristics of emerging market economies include ____ (low/high) debt-to-GDP ratios

Low

10

One of the key characteristics of emerging market economies include significant ____ (increase/decrease) in trade among and between emerging market economies

Increase

11

One of the key characteristics of emerging market economies include ___ (low/high) cost labor

Low

12

One of the key characteristics of emerging market economies include ___ (low/high) savings rates

High

13

One of the key characteristics of emerging market economies include ____ (large/small) currency reserves

Large

14

One of the key characteristics of emerging market economies include ____ (low/high) investment in infrastructure

High

15

One of the key characteristics of emerging market economies include rapid growth in the number of ______ (low, middle, high) class consumers

Middle

16

A key rationale or cause for the changing pattern of investment in agriculture by sovereign wealth funds would be:

to ensure food security in the event that crop shortages would cause export bans that might curtail their ability to import crops.

17

_________ is gross domestic product for a particular year adjusted for inflation compared to a base year using a price index. This adjusted number is then divided by population.

Real per Capita Gross Domestic Product

18

The Real per Capita Gross Domestic Product measure is used as an estimate of ____

of changes in well-being in a society over time

19

T/F

The Real per Capita Gross Domestic Product measure is not one of the variables one would traditionally see in national income calculations.

TRUE

20

Economic profit is generally _____ (lower/higher) than accounting profit due to the fact that ____ are included in the calculation of economic profits.

Lower

Implicit Costs

21

T/F

The Federal Reserve Bank prints money when the level of M1 appears low

FALSE

The actual printing of currency is controlled by the US Treasury

22

T/F

The Federal Reserve may sell government securities to control the supply of money

TRUE

23

T/F

The Federal Reserve may change the reserve ratio to control the supply of money

True

24

T/F

The Federal Reserve may raise or lower the discount rate to control the supply of money

TRUE

25

How is the trough of a business cycle generally characterized?

Unused productive capacity and an unwillingness to risk new investments

26

T/F

The trough of a business cycle is characterized by a specific sort of behavior with respect to costs and purchasing power

FALSE

The Trough of a business cycle is NOT typically characterized by these things

27

What indicator does the federal government use to measure inflation?

Consumer Price Index

28

What is the primary measure of the level of economic activity in the US?

GDP

29

Bank reserves would be ____ (increased/decreased) by a sale of government securities by the Federal Reserve

Decreased

30

A rise in price levels may result when costs of raw materials or labor increase. This type of price increase is called ____

Cost-Push Inflation