BUSN 201 EXAM QUESTIONS WITH ALL CORRECT ANSWERS
Which of the following best defines balance of trade? - Answer-The total value of a nation's exports minus the total value of its imports over some period of time.
The ability to produce a specific product more efficiently than any other natio...
Which of the following best defines balance of trade? - Answer-The total value of a
nation's exports minus the total value of its imports over some period of time.
The ability to produce a specific product more efficiently than any other nation is called
a comparative advantage? - Answer-False
The selling and shipping of raw materials or products to other nations is called? -
Answer-Exporting
where exports exceed imports - Answer-Trade surplus
Which of the following are non-tariff trade restrictions? - Answer-Import quota, Embargo,
foreign exchange control, currency devaluation, Bureaucratic red tape
An argument against trade restriction is - Answer-misallocation of international
resources.
Why would countries want to restrict trade - Answer-To equalize a nation's balance of
trade, to protect new or weak industries, to protect national security.
Reasons for trade restrictions - Answer-To protect health of citizens, to retaliate for
another nation's trade restrictions, to protect domestic jobs
Revenue Tariffs - Answer-are imposed to generate income for the government
Protective tariffs - Answer-are imposed to protect domestic industries from competition
by keeping the prices of imports at or above the price of domestic products
What are reasons against restricting trade? - Answer-Misallocation of international
resources, Higher prices for consumers, Restriction of consumer choices.
Free Enterprise - Answer-The system of business in which individuals are free to decide
what to produce, how to produce, and at what price to sell it.
Economics - Answer-The study of how wealth is created and distributed
Microeconomics - Answer-The study of decisions made by individuals and businesses
, Macroeconomics - Answer-The study of national economy and the global economy
Capitalism - Answer-Individuals own and operate the majority of businesses
Command Economy - Answer-Economic system in which the government decides what
goods and services will be produced and who owns and controls the major factors of
production
Productivity - Answer-The average level of output per worker per hour
Gross domestic product - Answer-The total dollar values of all goods and services
produced by all people within the boundaries of a country during a one- year period
Inflation - Answer-The general rise in the level of prices
Deflation - Answer-The general decrease in the level of prices
Unemployment Rate - Answer-The percentage of a nations labor force unemployment
at any time
The consumer price index - Answer-A monthly index that measures the changes in
price of a fixed prices of goods purchased by the typical consumer in an urban area
The Producer Price Index - Answer-Measures prices that producers receive for finished
goods (whole sale level)
Business cycle - Answer-The recurrence of periods of growth and recession in a
nations' economic activity
Recession - Answer-Two or Three or more consecutive three months periods of decline
in a countrys' GDP
Depression - Answer-A severe recession that lasts longer than a typical recession and
has a larger decline in business activity when compared to a recession
Monetary Policies - Answer-The Federal Reserve's decision that determine the size of
supply of money in the nations and level of interest rates
Fiscal Policies - Answer-The government can influence the amount of savings and
expenditures by altering the tax structure and changing levels of government spending
Federal Deficit - Answer-When the government spends more than it receives
National Debt - Answer-The total of all federal deficits
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