Unit 8 - Macroeconomics

The furniture in your home is from France, the tea you drink is from Britain, and the clothes you wear are made in Italy. Last year your lumber company sold and shipped many materials to Portugal. Which of the following is true about the economy in which you live?

• It relies on the buying and selling of one product

• It relies solely on agriculture

• It relies heavily on trade and commerce

• It relies on government control

This graph shows recent trends in U.S. exports to the South American country of Brazil. Which trend is supported by this graph?

• The United States is focusing on building trade with North American countries

• Brazil will be receiving more U.S. exports as part of a free trade agreement

• Trade with the United States is increasingly important to Brazil's economy

• Brazil's economy is remaining dependent on other South American countries

What is MOST likely the reason for the event described in the headline?

• Nations are preparing to raise taxes on goods and services

• Nations are training workers to use new tools and processes

• Nations are loaning money to people who want to start businesses

• Nations are seeking goods best produced outside their own borders

How would cheap lumber from Canada affect the U.S. market for new homes?

• Prices of new homes would increase

• Credit available for new homes would increase

• Prices of new homes would decrease

• Transaction costs for new homes would decrease

Assigning workers one task that is to be performed repeatedly is referred to as

• A division of labor

• Productivity

• Specialization

• A cottage industry

Which phrase BEST describes the effect of an increase in U.S. steel imports?

• Higher tariffs on foreign steel

• Less foreign steel bough by consumers

• Higher wages for U.S. steel workers

• Fewer goods sold by U.S. steel companies

Which of the following is an example of how nations depend upon each other for things they need?

• The United States imports oil and exports aircraft

• China creates policies that keep out foreign steel workers

• Japan creates policies that protect its electronics manufacturers

• Germany exports a large percentage of the machinery it produces

How does scarcity of resources affect the nations of the world?

• It causes nations to develop tax laws

• It causes nations to trade with one another.

• It decreases the need for nations to develop technology

• It decreases the need for nations to work together peacefully

Which of these terms is used to describe a company's ability to produce a good at a lower opportunity cost than another company?

• Trade imbalance

• Absolute advantage

• Non-structural barrier

• Comparative advantage

Which term is defined as the difference between the value of a nation's imports and the value of its exports?

• Balance of trade

• Per capital income

• Consumer price index

• Gross domestic product