POSC 2601 FINAL EXAM
QUESTIONS & ANSWERS(RATED
A+)
The world economy is _________ integrated on a global scale, generating wealth at
an ___________ pace. - ANSWERIncreasingly; Accelerating
A _________ would agree that a government's most useful role is to interfere in
economics only to regulate markets in order to help them function efficiently. That is,
politics should serve the interests of economic efficiency. - ANSWERLiberal
Liberals like free trade and free markets.
T/F: In the free market, governments set the prices of goods and services -
ANSWERFalse
Supply and Demand to determine the prices of goods and services.
"The creation of wealth underlies state power. Economics should serve politics" is a
statement in line with _______. - ANSWERMercantilism
The sources of backlash against free trade agreements are unlikely to include
__________. - ANSWERExporting firms
Exporting firms tend to have comparative advantage
Comparative Advantage - ANSWERProduce goods more cheaply than other trading
partners
Applying quotas on imports is a policy that would be followed by a __________. -
ANSWERProtectionist State
Quotas = Protectionist
What are two types of protectionist policies? - ANSWER1. Tariffs
2. Non-tariff barriers
Quotas, Subsidies, Other Restrictions and Regulations
A unilateral method of protecting domestic producers from ___________ by
imposing a limit on the maximum volume of allowable imports is known as a quota. -
ANSWERForeign Competition
Tax breaks, loans, and guaranteed high prices are examples of what type of
protectionism? - ANSWERSubsidies
, Subsidies - ANSWERPayments by a government to a domestic industry
What are the four objectives of protectionism? - ANSWER1. Cater to the demands of
important domestic industries and interests
2. Protect infant industries
3. Protect interests and industries that are vital to national security
4. Defend against predatory practices
Protectionism hurts an economy in which way? - ANSWERconsumers usually pay
higher prices for products
Protectionism hurts consumers
The balence of trade is the value of a state's imports relative to its _________. -
ANSWERExports
T/F: Comparative advantage is when states try to produce everything it needs by
itself - ANSWERFalse Autarky
Autarky - ANSWERA policy of self-reliance, where trade only occurs in one's own
state.
T/F: A customs union is created when states decide to reduce trade barriers and
adopt a common tariff toward states that are not members of the group. -
ANSWERTrue
T/F: Multilateral agreements are easier to enforce than bilateral agreements -
ANSWERFalse
Issue of: Collective Goods Problem
collective goods problem - ANSWERThe problem of providing something that
benefits all members of a group regardless of what each member (slackers)
contributes to it
Autarkic states tend to exhibit what type of growth? - ANSWERLow
When states specialize in producing the goods that they produce best and trading for
goods that other states are better at producing, they are operating according to
____________. - ANSWERThe comparative advantage
T/F: When national endowments are scarce, prices of goods from those national
endowments are cheap. - ANSWERFalse
No Supply = Expensive
Abundant Supply = Cheap
What are the three types of economic pressure? - ANSWEREconomic sanctions
Economic warfare
QUESTIONS & ANSWERS(RATED
A+)
The world economy is _________ integrated on a global scale, generating wealth at
an ___________ pace. - ANSWERIncreasingly; Accelerating
A _________ would agree that a government's most useful role is to interfere in
economics only to regulate markets in order to help them function efficiently. That is,
politics should serve the interests of economic efficiency. - ANSWERLiberal
Liberals like free trade and free markets.
T/F: In the free market, governments set the prices of goods and services -
ANSWERFalse
Supply and Demand to determine the prices of goods and services.
"The creation of wealth underlies state power. Economics should serve politics" is a
statement in line with _______. - ANSWERMercantilism
The sources of backlash against free trade agreements are unlikely to include
__________. - ANSWERExporting firms
Exporting firms tend to have comparative advantage
Comparative Advantage - ANSWERProduce goods more cheaply than other trading
partners
Applying quotas on imports is a policy that would be followed by a __________. -
ANSWERProtectionist State
Quotas = Protectionist
What are two types of protectionist policies? - ANSWER1. Tariffs
2. Non-tariff barriers
Quotas, Subsidies, Other Restrictions and Regulations
A unilateral method of protecting domestic producers from ___________ by
imposing a limit on the maximum volume of allowable imports is known as a quota. -
ANSWERForeign Competition
Tax breaks, loans, and guaranteed high prices are examples of what type of
protectionism? - ANSWERSubsidies
, Subsidies - ANSWERPayments by a government to a domestic industry
What are the four objectives of protectionism? - ANSWER1. Cater to the demands of
important domestic industries and interests
2. Protect infant industries
3. Protect interests and industries that are vital to national security
4. Defend against predatory practices
Protectionism hurts an economy in which way? - ANSWERconsumers usually pay
higher prices for products
Protectionism hurts consumers
The balence of trade is the value of a state's imports relative to its _________. -
ANSWERExports
T/F: Comparative advantage is when states try to produce everything it needs by
itself - ANSWERFalse Autarky
Autarky - ANSWERA policy of self-reliance, where trade only occurs in one's own
state.
T/F: A customs union is created when states decide to reduce trade barriers and
adopt a common tariff toward states that are not members of the group. -
ANSWERTrue
T/F: Multilateral agreements are easier to enforce than bilateral agreements -
ANSWERFalse
Issue of: Collective Goods Problem
collective goods problem - ANSWERThe problem of providing something that
benefits all members of a group regardless of what each member (slackers)
contributes to it
Autarkic states tend to exhibit what type of growth? - ANSWERLow
When states specialize in producing the goods that they produce best and trading for
goods that other states are better at producing, they are operating according to
____________. - ANSWERThe comparative advantage
T/F: When national endowments are scarce, prices of goods from those national
endowments are cheap. - ANSWERFalse
No Supply = Expensive
Abundant Supply = Cheap
What are the three types of economic pressure? - ANSWEREconomic sanctions
Economic warfare
