POSC 2601 Final Exam Part 1
Questions with 100% Correct Answers
Theories of trade Correct Answer: marxism, mercantilism, liberalism
Marxism Correct Answer: rooted in Karl Marx and Fredrich Engels, focusing on
capitalism, class struggle, class struggle, and exploitation
-economics to determine politics
Mercantilism Correct Answer: trade and economic policies are manipulated to
build up a monetary surplus that could be used to finance war
-politics to determine economics
Liberalism Correct Answer: maximize absolute gains for all actors (i.e. wealth,
prosperity, well-being)
Free market Correct Answer: a system where an "invisible hand" acts to guide
the most efficient patterns of production, exchange, and consumption
Free trade Correct Answer: the flow of goods and services across national
boundaries unimpeded by tariffs or other restrictions
Comparative advantage Correct Answer: trade the goods states make
cheaply/efficiently for those goods and services they cannot
National endowments Correct Answer: land, labor, capital
Division of labor (specialization) Correct Answer: economic efficiency
Autarky Correct Answer: an economy that is self-contained and does not
engage in trade with outsiders
, -low growth
Problems of free trade Correct Answer: -creates winners and losers
-long-term benefits create short-term costs
Protectionism Correct Answer: 1. 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
Tariffs Correct Answer: a duty or tax placed on certain types of imports when
they enter a country (restrict imports, a source of govt revenue)
Non-tariff barriers Correct Answer: any other form of restricting imports besides
the use of tariffs
-quotas, subsidies, and restrictions/regulations
Quotas Correct Answer: a limit on the supply of goods coming from a specific
state
-ex: US limit imports of Japanese cars in the 1980s
Subsidies Correct Answer: payments by a govt to a domestic industry to lower
the price
-EU's Common Agricultural Policy (CAP)
Restrictions Correct Answer: labor and environmental regulations
Questions with 100% Correct Answers
Theories of trade Correct Answer: marxism, mercantilism, liberalism
Marxism Correct Answer: rooted in Karl Marx and Fredrich Engels, focusing on
capitalism, class struggle, class struggle, and exploitation
-economics to determine politics
Mercantilism Correct Answer: trade and economic policies are manipulated to
build up a monetary surplus that could be used to finance war
-politics to determine economics
Liberalism Correct Answer: maximize absolute gains for all actors (i.e. wealth,
prosperity, well-being)
Free market Correct Answer: a system where an "invisible hand" acts to guide
the most efficient patterns of production, exchange, and consumption
Free trade Correct Answer: the flow of goods and services across national
boundaries unimpeded by tariffs or other restrictions
Comparative advantage Correct Answer: trade the goods states make
cheaply/efficiently for those goods and services they cannot
National endowments Correct Answer: land, labor, capital
Division of labor (specialization) Correct Answer: economic efficiency
Autarky Correct Answer: an economy that is self-contained and does not
engage in trade with outsiders
, -low growth
Problems of free trade Correct Answer: -creates winners and losers
-long-term benefits create short-term costs
Protectionism Correct Answer: 1. 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
Tariffs Correct Answer: a duty or tax placed on certain types of imports when
they enter a country (restrict imports, a source of govt revenue)
Non-tariff barriers Correct Answer: any other form of restricting imports besides
the use of tariffs
-quotas, subsidies, and restrictions/regulations
Quotas Correct Answer: a limit on the supply of goods coming from a specific
state
-ex: US limit imports of Japanese cars in the 1980s
Subsidies Correct Answer: payments by a govt to a domestic industry to lower
the price
-EU's Common Agricultural Policy (CAP)
Restrictions Correct Answer: labor and environmental regulations
