GPEexam1 - & The economic philosophy that favors strict...

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10/10/2013 ° The economic philosophy that favors strict limits on imports and strong support for exports is called: ° A)zero sum ° B) autarky ° C) mercantilism. ° D) comparative advantage. ° E) absolute advantage. ° ° Economic restructuring that takes place as a result of opening to trade with other countries ° A) contradicts the idea of gains from trade. ° B) causes some trading activity to be zero sum. ° C) worsens the nation's allocation of resources. ° D) improves the nation's allocation of resources. ° E) is a highly unlikely event. ° ° Interindustry trade refers to… ° A) international trade of products made within the same industry. ° B) domestic trade of products made within the same industry. ° C) international trade of products made across different industries . ° D) the exchange of similar items that are differentiated. ° E) None of the above. ° ° 12) An internal economies of scale is defined as ° A) one whose size or scale effects are not located in the firm, but in the industry. ° B) one with falling costs over a specific level of output. ° C)one with falling costs over a relatively large range of output. ° D) one with falling costs over a relatively large range of output, but definite declining profits. °
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Chapter 1: The US in a Global Economy ° Chapter Summary
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Openness index – How to calculate, what it means Integration (shallow v. deep) RTA: Regional Trade Agmt (meaning and examples of) FDI: definition; relevance of external capital flow to given state Determinant of amount of investment in a country depends upon: Savings Three features of contemporary econ relations: (1) Integration, (2) multilateral orgs, (3) RTAs ° ° Chapter 1 ° -Index of openness = (exports + imports) / GDP The value of all final goods and services produced inside a nation during some period, usually a year Small countries tend to have higher measure of openness ° -Shallow integration- elimination of tariffs (taxes on imports) and quotas (quantitative restrictions on imports) also known as integration of the border ° -Deep integration- elimination of reduction of trade barriers caused by non-trade related domestic policies Directly affects more than the flow of goods and services across a nations boundaries since a variety of domestic policies may be changed ° -Regional Trade Agreement (RTA) Agreements between two or more countries, each offering the others preferential access to its markets. RTAs provide varying degrees of access and variable amounts of deep integration Exs.) NAFTA, EU, Mercado Comun del Sur, Asia Pacific Economic Cooperation ° -FDI (Foreign Direct Investment) The purchase of physical assets such as real estate or businesses by a foreign company or individual. It can be outward (citizens or businesses in the home country purchase assets in a foreign country) or inward (foreigners purchase assets in the home country) High savings correlated with high investment rates
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Low savings correlated with low investment °
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