Podcast
Questions and Answers
Which of the following best describes the economic theory proposed by Adam Smith in The Wealth of Nations?
Which of the following best describes the economic theory proposed by Adam Smith in The Wealth of Nations?
- Protectionism, where countries should use tariffs and subsidies to protect domestic industries
- Mercantilism, where countries should promote exports and discourage imports
- Comparative advantage, where countries should specialize in producing goods they can make at a lower opportunity cost
- Absolute advantage, where countries should specialize in producing goods they can make more efficiently (correct)
According to the passage, what is the key assumption underlying Adam Smith's theory of value?
According to the passage, what is the key assumption underlying Adam Smith's theory of value?
- Value is determined by the demand for the good or service
- Value is determined by the price set by the market
- Value is determined by the cost of production, including capital and land
- Value is determined based on labor, as labor is the only production factor (correct)
What is the main reason countries like Japan, China, Singapore, Taiwan, and Germany are described as practicing a form of neo-mercantilism in the passage?
What is the main reason countries like Japan, China, Singapore, Taiwan, and Germany are described as practicing a form of neo-mercantilism in the passage?
- They have high levels of economic growth and industrialization
- They have high tariffs and subsidies to promote exports and discourage imports (correct)
- They have large trade surpluses with other countries
- They have high levels of government intervention in their economies
According to the passage, what is the key condition for two nations to mutually benefit from trade?
According to the passage, what is the key condition for two nations to mutually benefit from trade?
What is the main reason, according to the passage, that countries should specialize in producing goods they have an absolute advantage in?
What is the main reason, according to the passage, that countries should specialize in producing goods they have an absolute advantage in?
Which of the following best describes the key difference between absolute advantage and comparative advantage as trade theories?
Which of the following best describes the key difference between absolute advantage and comparative advantage as trade theories?
Why does the passage state that Adam Smith doubted the mercantilism theory of the time in The Wealth of Nations?
Why does the passage state that Adam Smith doubted the mercantilism theory of the time in The Wealth of Nations?
What is the main reason, according to the passage, that countries should specialize in producing goods they have a comparative advantage in?
What is the main reason, according to the passage, that countries should specialize in producing goods they have a comparative advantage in?
Which of the following best describes the key assumption underlying Adam Smith's theory of absolute advantage?
Which of the following best describes the key assumption underlying Adam Smith's theory of absolute advantage?
How does the passage suggest that countries practicing neo-mercantilism differ from the mercantilism theory described by Adam Smith?
How does the passage suggest that countries practicing neo-mercantilism differ from the mercantilism theory described by Adam Smith?
Flashcards are hidden until you start studying
