ECONOMICS UNIT 7 TEST QUESTIONS AND ANSWERS
one country's ability to produce a given product relatively more efficiently than another country -
CORRECT ANSWER✅✅Comparative advantage
the difference between money paid to and money received from other nations when engaged in trade -
CORRECT ANSWER✅✅balance of payments
a system under which the values of currencies are fixed in relation to one another - CORRECT
ANSWER✅✅fixed exchange rates
a system that relies on supply and demand to determine the value of one currency in terms of another -
CORRECT ANSWER✅✅floating exchange rates
one country's ability to produce more of a given product than another country - CORRECT
ANSWER✅✅absolute advantage
diagram representing maximum combinations of goods and/or services an economy can produce when
all productive resources are fully employed - CORRECT ANSWER✅✅production possibilities curve
a tax placed on imported goods to raise revenue - CORRECT ANSWER✅✅revenue tariff
a tax on an imported product designed to protect less efficient domestic producers - CORRECT
ANSWER✅✅protective tariff
the next best alternative use of money, time, or resources when one choice is made rather than another
- CORRECT ANSWER✅✅opportunity cost
foreign currencies used by countries to conduct international trade - CORRECT ANSWER✅✅foreign
exchange
, splitting work into a number of separate tasks to be performed by different workers - CORRECT
ANSWER✅✅division of labor
act of not repaying borrowed money - CORRECT ANSWER✅✅default
a group of sellers or producers acting together to raise prices by restricting availability of a product -
CORRECT ANSWER✅✅cartel
pollution in the form of rainwater mixed with sulfur dioxide to form a mild form of sulfuric acid -
CORRECT ANSWER✅✅acid rain
government confiscation of private- or foreign-owned goods without compensation - CORRECT
ANSWER✅✅expropriation
substantial oversupply of a product - CORRECT ANSWER✅✅glut
mixture of 90 percent unleaded gasoline and 10 percent grain alcohol - CORRECT ANSWER✅✅gasohol
loans that may never be paid back; usually involves loans to developing countries - CORRECT
ANSWER✅✅soft loans
hiring outside firms to perform non-core operations to lower operating costs - CORRECT
ANSWER✅✅outsourcing
condition in which the average number of births and deaths balance so that population size is
unchanged - CORRECT ANSWER✅✅zero population growth
independently owned group of Japanese business firms united to regulate competition - CORRECT
ANSWER✅✅keiretsu
one country's ability to produce a given product relatively more efficiently than another country -
CORRECT ANSWER✅✅Comparative advantage
the difference between money paid to and money received from other nations when engaged in trade -
CORRECT ANSWER✅✅balance of payments
a system under which the values of currencies are fixed in relation to one another - CORRECT
ANSWER✅✅fixed exchange rates
a system that relies on supply and demand to determine the value of one currency in terms of another -
CORRECT ANSWER✅✅floating exchange rates
one country's ability to produce more of a given product than another country - CORRECT
ANSWER✅✅absolute advantage
diagram representing maximum combinations of goods and/or services an economy can produce when
all productive resources are fully employed - CORRECT ANSWER✅✅production possibilities curve
a tax placed on imported goods to raise revenue - CORRECT ANSWER✅✅revenue tariff
a tax on an imported product designed to protect less efficient domestic producers - CORRECT
ANSWER✅✅protective tariff
the next best alternative use of money, time, or resources when one choice is made rather than another
- CORRECT ANSWER✅✅opportunity cost
foreign currencies used by countries to conduct international trade - CORRECT ANSWER✅✅foreign
exchange
, splitting work into a number of separate tasks to be performed by different workers - CORRECT
ANSWER✅✅division of labor
act of not repaying borrowed money - CORRECT ANSWER✅✅default
a group of sellers or producers acting together to raise prices by restricting availability of a product -
CORRECT ANSWER✅✅cartel
pollution in the form of rainwater mixed with sulfur dioxide to form a mild form of sulfuric acid -
CORRECT ANSWER✅✅acid rain
government confiscation of private- or foreign-owned goods without compensation - CORRECT
ANSWER✅✅expropriation
substantial oversupply of a product - CORRECT ANSWER✅✅glut
mixture of 90 percent unleaded gasoline and 10 percent grain alcohol - CORRECT ANSWER✅✅gasohol
loans that may never be paid back; usually involves loans to developing countries - CORRECT
ANSWER✅✅soft loans
hiring outside firms to perform non-core operations to lower operating costs - CORRECT
ANSWER✅✅outsourcing
condition in which the average number of births and deaths balance so that population size is
unchanged - CORRECT ANSWER✅✅zero population growth
independently owned group of Japanese business firms united to regulate competition - CORRECT
ANSWER✅✅keiretsu
