Monetary Policy & International
Economics
Unit Review
• Being able to produce things completely
better than someone else.
• Absolute Advantage
• Being able to produce things relatively better
than someone else.
• Comparative Advantage
• Tax on imports
• Tariff
• Restriction on quantity of trade.
• Quota
• Total restriction on trade.
• Embargo
• Free trade agreement between US, Mexico
and Canada.
• North American Free Trade Agreement or
NAFTA
• Collection of European countries to promote
free trade.
• European Union or EU
• A new industry that struggles to compete with
more established competitors abroad, and an
economic reason for why trade barriers exist.
• Infant Industries
• Exports vs. Imports
• Balance of Trade
• Trade without tariffs or restrictions.
• Free Trade
• When our currency buys more of foreign
currency.
• Strong Dollar
• When our currency buys less of foreign
currency.
• Weak Dollar
• Moving jobs overseas for lower wages or to
avoid taxes.
• Outsourcing
• Current Chairman of the Federal Reserve
• Ben Bernanke
• Former Chairman of the Federal Reserve
• Alan Greenspan
• They decide Monetary Policy in our country.
• FOMC
• When inflation is a problem, this type of
monetary policy is appropriate.
• Contractionary
• Currently the U.S. has a _________ balance of
trade and ________ balance of payments
• Negative / Negative or Unfavorable /
Unfavorable
• The concept where some companies and
industries try to get their government to
shield them from foreign competition is
known as:
• Protectionism
• Purchasing government bonds, lowering the
discount rate and lowering the reserve ratio
are all examples of this type of monetary
policy.
• Expansionary
• Theory of a nation being self-sufficient with
high tariffs and a network of colonies.
• Mercantilism
• The current reserve requirement by the
Federal Reserve.
• 10%
• The President who removed the U.S. from the
Gold Standard.
• Richard Millhouse Nixon
• The FDIC currently insures all bank deposits
for this amount.
• $250,000
• There are ____ federal reserve districts and
Chicago is in the ____ district.
• 12 / 7th
• The code on a check, how many numbers? ( so
you know what federal reserve bank the check
is based out of and will be processed from).
• Two. Ex: 02, 09
• For a long time Alan Greenspan refused to
lower interest rates, despite constant
criticism. What was he afraid raising interest
rates would do?
• Inflation
• Country A can make 100 cars or 70 computers
• Country B can make 70 cars or 60 computers
• Who has a comparative advantage(list for
each) and who has absolute advantage (list for
each)?
• Absolute: Country A for both
• Comparative: computers B cars A
– 100 cars and 60 computers, otherwise it’s 70 cars
& 70 computers. 70/100 or 60/70. Country B is
closer in computer production.