Shared Flashcard Set

Details

APE - Test 3
APE - Test 3: F&M, Debt & deficit, Globlization
97
History
Undergraduate 2
05/17/2011

Additional History Flashcards

 


 

Cards

Term
What are the 3 similarities of Fiscal & Monetary Policy?
Definition

1. Both affect the power of the dollar in the world & grocery store

2. Both affect you base purchasing power

3. We have little influence over either; We have a little power over the Fiscal policy

Term
What are the differences between between Fiscal & Monetary Policy?
Definition

1. Fiscal is controlled by the gov't, pres. & congress.

2. Fiscal uses taxing & gov't spending as it's tools.

3. Monetary is controlled by the Federal Reserve Board & its banks.

4. Monetary is concerned with the flow of money.

Term
What are the primary influences of Fiscal Policy?
Definition

1. president

2. congress

Term
How does the Pres. influence Fiscal Policy? (2)
Definition

1. Submits a budget

2. recommends how the federal gov't should tax, spend and borrow for the year

Term
What is the political year?
Definition
Oct 1 - Sept 30
Term
What does the Office of Management & Budget do? (4)
Definition

1. helps the Pres. in overseeing the preparation of the budget

2. supervises its admin. in Executive Branch agencies

3. evaluates the effectiveness of agency programs.

4. sets funding priorities

Term
What 3 agencies are under the Executive Office to help with the Fiscal Policy?
Definition

1. Office of management & budget

2. Council of Economic Advisors

3. Department of the Treasury

Term
What does the Council of Economic Advisors do for Fiscal Policy? (3)
Definition

1. assist the Pres. in the preparation of the economic report

2. gathers info concerning the economic development, both current and prospective.

3. develops national economic policy 

Term
What is the council of economic policy?
Definition
three members appointed by the Pres. with the consent of the Senate.
Term
How long is policy set by the Council of Economic Advisors?
Definition
12 years
Term
what is economic policy?
Definition
projected economic views from the CEA & CBO for the future
Term
How is the Dept. of Treasury run?
Definition
Headed by the Secretary and is a formal cabinet position
Term
What does the Dept. of Treasury do? (5)
Definition

1. collects taxes

2.borrows money

3. pays the bills

4. prints the money

5. governor of to the IMF, IBRD, Inter-American Development Bank, The Asian Development Bank, and The African Development Bank.

Term
True or False: The Dept. of Treasury is normally a very powerful position in setting economic policy?
Definition
true
Term
Who is the Secretary of the Treasury?
Definition
Tim Gaithner
Term
Who is the chief accountant of the US?
Definition
secretary of the treasury
Term
True or False: Congress's Power is just as far-reaching as the Pres.?
Definition
False
Term
What was created from BICA?
Definition
CBO office to counter the CEA
Term
What does the CBO provide for Congress? (2)
Definition

1. more influence over the budget

2. more accountability of funds in each administrative department

Term
True or False: Congress alone has the power to increase emergency funding for projects beyond the budget?
Definition
true
Term
True or False: Only President can spend money?
Definition
false: Only Congress can spend money
Term
What is monetary policy?
Definition
what money can be borrowed; interest rates & repayment requirements.
Term
Does the Federal Reserve need the approval of Congress or Pres. to act?
Definition
nope
Term
What does the federal reserve do?
Definition

1. manages the nation's supply of money and credit and operates at the center of the nation's financial system.

2. monitors currency transaction, electronic payments and check clearing services.

3. serves as the banker for the fed. gov't

4. supervises and regulates a large share of the nation's banking and financial systems.

Term
What is the federal reserve?
Definition
central bank of the US
Term

What are the three parts of the Fed Reserve?

Definition

1. Board of Govenors 

2. Federal Reserve banks

3. Federal Open Market Committee

Term
How many districts make up the federal reserve banks?
Definition
12
Term
What does the structure of the Fed. Reserve reflect? (2)
Definition

1. hostilility of americans to centralized authority

2. fear that a central bank would be in the pocket of wall street

Term
What is the Federal reserve board/board of governors?
Definition
seven member appointed by the pres. and confirmed by the Senate and serve a 14 year term.
Term
How many times a year does the chairman report to Congress?
Definition
twice a year
Term
How long does the chair and vice serve their positions on the board?
Definition
4 years
Term
Who is the fed. reserve board chair?
Definition
ben s. bernanki
Term
What is the FOMC? (federal open market committee)
Definition
seven members of the board, president of the federal reserve bank, president of the federal reserve bank of FRBNY and presidents from 4 other federal reserve banks.
Term
What branch of the Federal reserve system is the focal point for making policy?
Definition
FOMC
Term
how many times year does the FOMC meet?
Definition
8 times a year
Term
true or false: the FOMC issues directives to the trading desk at FRBNY
Definition
true
Term
Does the FOMC issue a public announcement after each meeting?
Definition
yes, since 1994
Term
where are open market operations conducted?
Definition
trading desk at FRBNY
Term
True or False: the Fed is more independent than other gov't entities
Definition
true
Term
Why should the Fed be independent? 3
Definition

1. has longer run objectives

2. avoids political business cycle

3. won't spend money right then to buy themselves out of debt

Term
Why shouldn't the Fed be independent? 3
Definition

1. may not be accountable

2. hinders coordination of monetary & fiscal policy

3. bad performance

Term
What makes the Fed independent?
Definition

1. 14 year terms

2. fed is financially independent

Term
What makes the fed dependent? 2
Definition

1. congress can amend fed legislation

2. president appoints chairmen & board and can influence legislation

Term
What are the two types of independence of the Fed?
Definition

1. ability to set monetary policy instruments

2. ability to set monetary policy goal

Term
debt
Definition
the total amount of money owed by the gov't
Term
deficit
Definition
the yearly amount when expenses exceed revenue
Term
true or false: you can be in debt without deficit spending?
Definition
true
Term
What causes deficit spending? 6
Definition

1. poor planning by the gov't

2. natural disasters

3. war

4. pork barreling policies

5. corruption in the gov't

6. increase in plant & base closure

 

Term
when does debt become a problem?
Definition
1. when it's higher than the GDP.
Term
What is globalization?
Definition
the increased amount of global economic trade
Term
Why are national economies less isolated? 5
Definition

1. lower cross-border trade and investment barriers

2. smaller geographic time zones and distance.

3.fewer national gov't regulations

4. less idiosyncratic business systems

5. lower impact on national culture differences

 

Term
true or false: Historically distinct and separate markets are merging into a huge global marketplace for consumer products only and not industrial.
Definition
false: for both consumer & industrial
Term
What is: MNC, TNC & MNE?
Definition

1. multi national coorporation - produce in 1 country and sell in multiple

2. trans national coorporation - produce in 1 country and sell in 1 country

3. multi national enterprise - produce in mult. countries and sell globally

Term
true or false: MNC foreign operations are becoming more vulnerable to competition in their home markets.
Definition
true
Term
Why do individual MNC's disperse different parts of their operations to narrow sets of locations around the world? 3
Definition

1. national advantage of factors of produce

2. global web of suppliers and consumers

3. stake of foreign gov'ts in MNC operations

Term
What are factors of produce?
Definition

1. labor

2. land

3. capital

4. energy

5. expertise

6. transferability

Term
What is the globalization of markets and production a result of?
Definition
lowering trade barriers
Term
What has the globalization of markets and production been enabled by?
Definition
technological change
Term
Telecommunications & Microprocessors have allowed for what to cause globalization? 2
Definition

1. high power/low cost computing

2.increase in information processing capacity

Term
international business
Definition
any firm that engages in international trade or investment
Term
true or false: an MNE is any business that has productive activities in TWO or more countries?
Definition
true
Term
what is regional economic integration?
Definition
agreements among geographically proximate countries to reduce/remove tariff and non-tariff barriers to free flow of:goods, services and factors of produce
Term
List the levels of economic integration - 5
Definition

1. Free Trade Area

2. Customs Union

3. Common Market

4. Economic Union

5. Political Union

Term
What does FTA provide? 2
Definition

1. removes tariffs among members

2. members retain own trade policies toward others

Term
What does CU provide? 1
Definition
common trade policy toward others
Term
What does CM provide?
Definition
elimination of intra-market factor of production movements
Term
What does EU provide?
Definition
full integration of member economies
Term
What does PU provide?
Definition
political integration
Term
What are the economic reasons for regional economic integration?
Definition

1. free trade

2. free FDI

Term
What are the Political reasons for economic regional integration?
Definition

1. interdependencies and less war

2. more political clout

Term
What are 3 problems with Regional Economic Integration?
Definition

1. painful adjustments to economy

2. threat to sovereignty

3. imbalanced economic systems

Term
Who is apart of NAFTA?
Definition
US, Mexico and Canada
Term
Who is apart of the Andean Community? What type of economic integration is it?
Definition

Bolivia, Ecuador, Colombia and Peru.

Common Market

Term
Who is apart of MERCOSUR? What type of E.I. is it? What's it nickname?
Definition

1. brazil, argentina, uruguay and paraguay

2. FTA

3. southern cone

Term
Who is apart of the DR-CAFTA?
Definition
costa rica, el salvador, guatemala, honduras, nicaragua, dominican republic
Term
Who is apart of the group of three?
Definition
Mexico, Venezuela and Colombia
Term

Who is the largest trading relationship? Who is the Mexico's largest trading partner?

Who is the US's 2nd largest trading partner?

Definition

1. USA & Canada

2. US

3. Mexico

 

Term
What are the key provisions of NAFTA? 7
Definition

1. tariffs reduced across all sectors by 99%

2. FDI unrestricted (oil & railways = mexico, culture = canada, airlines & communication = USA)

3. no free movement of labor

4. protection of property rights

5. cross-border flow of services unrestricted

6. application of environmental standards

7. US & Canada have penalities for health/safety, child labor & minimum wage

Term
What opportunities does globalization provide for business?
Definition

1. less protectionism, higher economic growth

2. lower cost of doing business

Term
What threats does globalization pose to business? 4
Definition

1. cultural differences

2. price competition increased

3. across-trading-block rivalry

4. improvement of competitiveness of many local firm w/in the blocks

Term
true or false: the gov't more often manages trade?
Definition
true
Term
how does the gov't manage trade?3
Definition

1. restriction of imports

2. promotion of exports

3. trade promo and FDI incentives

Term
What are the instruments of trade policy? 7
Definition

1. tariffs

2. subsidies

3. import quotas

4. voluntary export restraints

5. local content requirements

6. anti-dumping policies

7. administrative policies

Term
specific tariffs
Definition
fixed charge for each good imported
Term
ad valorem tariff
Definition
a % imported goods value
Term
subsidies
Definition
gov't payments to domestic producers
Term
what is the aim of subsidies? 4
Definition

1. compete against cheaper imports

2. gain export markets

3. increase domestic employment

4. first-mover advantage

Term
import quota
Definition
government specifies how much of what product can be imported from which country
Term
voluntary export restraint
Definition
quota imposed by the exporting country officially and unofficially
Term
what are 2 reasons that a country uses a voluntary export restraint?
Definition

1. artificially keeps prices high

2. they may be threatened

Term
local content requirements
Definition
some % of a good must be produced domestically with local resources and labor
Term
who mostly uses local content requirements?
Definition
lesser developed countries
Term
dumping
Definition
selling good in an overseas market below market price and production costs
Term
admin. policies
Definition
bureaucratic rules that make it difficult for imports to enter a country
Term
What are the political arguments for intervention? 5
Definition

1. national security

2. individual industries and jobs protected

3. retaliation

4.consumer protection

5. furthering foreign poily

Term
What are the economic arguments for intervention? 2
Definition

1.infant industry protection

2. strategic trade policy

Term
what does globalization provide for the business? 4
Definition

1. trade barriers affect firm strategy

2. gov't policy has direct impact on firm business

3. nationalization of foreign plants

4. intergration may aid in preventing wars but it increases economic colonialism

Supporting users have an ad free experience!