Question 1

Which of the following is NOT a major concern of international economic theory?

Accepted Answer

A)  protectionism 
B)  the balance of payments 
C)  exchange rate determination 
D)  bilateral trade relations with China 
E)  the international capital market 
A)  protectionism 
B)  the balance of payments 
C)  exchange rate determination 
D)  bilateral trade relations with China 
E)  the international capital market

Question 2

In 1998 an economic and financial crisis in South Korea caused it to experience

Accepted Answer

A)  a surplus in their balance of payments. 
B)  a deficit in their balance of payments. 
C)  a balanced balance of payments. 
D)  an unbalanced balance of payments. 
E)  a lull in international trade. 
A)  a surplus in their balance of payments. 
B)  a deficit in their balance of payments. 
C)  a balanced balance of payments. 
D)  an unbalanced balance of payments. 
E)  a lull in international trade.

Question 3

Who sells what to whom

Accepted Answer

A)  has been a major preoccupation of international economics. 
B)  is not a valid concern of international economics. 
C)  is not considered important for government foreign trade policy since such decisions are made in the private competitive market. 
D)  is determined by political rather than economic factors. 
E)  is less important than international economic theory. 
A)  has been a major preoccupation of international economics. 
B)  is not a valid concern of international economics. 
C)  is not considered important for government foreign trade policy since such decisions are made in the private competitive market. 
D)  is determined by political rather than economic factors. 
E)  is less important than international economic theory.

Question 4

After World War II, the United States has pursued a broad policy of

Accepted Answer

A)  strengthening "Fortress America" protectionism. 
B)  removing barriers to international trade. 
C)  isolating Iran and other members of the "axis of evil." 
D)  protecting the U.S. from the economic impact of oil producers. 
E)  restricting trade of manufactured goods. 
A)  strengthening "Fortress America" protectionism. 
B)  removing barriers to international trade. 
C)  isolating Iran and other members of the "axis of evil." 
D)  protecting the U.S. from the economic impact of oil producers. 
E)  restricting trade of manufactured goods.

Question 5

If there are large disparities in wage levels between countries, then

Accepted Answer

A)  trade is likely to be harmful to both countries. 
B)  trade is likely to be harmful to the country with the high wages. 
C)  trade is likely to be harmful to the country with the low wages. 
D)  trade is likely to be harmful to neither country. 
E)  trade is likely to have no effect on either country. 
A)  trade is likely to be harmful to both countries. 
B)  trade is likely to be harmful to the country with the high wages. 
C)  trade is likely to be harmful to the country with the low wages. 
D)  trade is likely to be harmful to neither country. 
E)  trade is likely to have no effect on either country.

Question 6

The balance of payments has become a central issue for the United States because

Accepted Answer

A)  when the balance of payments is not balanced, society is unbalanced. 
B)  the U.S. economy cannot grow when the balance of payments is in deficit. 
C)  the U.S. has run huge trade deficits in every year since 1982. 
D)  the U.S. never experienced a surplus in its balance of payments. 
E)  the U.S. once ran a large trade surplus of about $40 billion. 
A)  when the balance of payments is not balanced, society is unbalanced. 
B)  the U.S. economy cannot grow when the balance of payments is in deficit. 
C)  the U.S. has run huge trade deficits in every year since 1982. 
D)  the U.S. never experienced a surplus in its balance of payments. 
E)  the U.S. once ran a large trade surplus of about $40 billion.

Question 7

From 1950 to 2015

Accepted Answer

A)  the U.S. economy roughly tripled in size. 
B)  U.S. imports roughly tripled in size. 
C)  the share of U.S. trade in the global economy roughly tripled in size. 
D)  U.S. imports roughly tripled as compared to U.S. exports. 
E)  U.S. exports roughly tripled in size. 
A)  the U.S. economy roughly tripled in size. 
B)  U.S. imports roughly tripled in size. 
C)  the share of U.S. trade in the global economy roughly tripled in size. 
D)  U.S. imports roughly tripled as compared to U.S. exports. 
E)  U.S. exports roughly tripled in size.

Question 8

The GATT is

Accepted Answer

A)  an international agreement. 
B)  an international U.N. agency. 
C)  an international IMF agency. 
D)  a U.S. government agency. 
E)  a collection of tariffs. 
A)  an international agreement. 
B)  an international U.N. agency. 
C)  an international IMF agency. 
D)  a U.S. government agency. 
E)  a collection of tariffs.

Question 9

The international capital market is

Accepted Answer

A)  the place where you can rent earth moving equipment anywhere in the world. 
B)  a set of arrangements by which individuals and firms exchange money now for promises to pay in the future. 
C)  the arrangement where banks build up their capital by borrowing from the Central Bank. 
D)  the place where emerging economies accept capital invested by banks. 
E)  exclusively concerned with the debt crisis that ended in the 1990s. 
A)  the place where you can rent earth moving equipment anywhere in the world. 
B)  a set of arrangements by which individuals and firms exchange money now for promises to pay in the future. 
C)  the arrangement where banks build up their capital by borrowing from the Central Bank. 
D)  the place where emerging economies accept capital invested by banks. 
E)  exclusively concerned with the debt crisis that ended in the 1990s.

Question 10

The international financial crisis of 2007 was the result of

Accepted Answer

A)  failure of the Euro currency. 
B)  runaway inflation in the U.S. 
C)  a deep global recession. 
D)  the collapse of global currency markets. 
E)  defaults on U.S. mortgage-backed securities. 
A)  failure of the Euro currency. 
B)  runaway inflation in the U.S. 
C)  a deep global recession. 
D)  the collapse of global currency markets. 
E)  defaults on U.S. mortgage-backed securities.

Question 11

Trade theorists have proven that the gains from international trade

Accepted Answer

A)  must raise the economic welfare of every country engaged in trade. 
B)  must raise the economic welfare of everyone in every country engaged in trade. 
C)  must harm owners of "specific" factors of production. 
D)  will always help "winners" by an amount exceeding the losses of "losers." 
E)  usually outweigh the benefits of protectionist policies. 
A)  must raise the economic welfare of every country engaged in trade. 
B)  must raise the economic welfare of everyone in every country engaged in trade. 
C)  must harm owners of "specific" factors of production. 
D)  will always help "winners" by an amount exceeding the losses of "losers." 
E)  usually outweigh the benefits of protectionist policies.

Question 12

Which of the following does NOT belong?

Accepted Answer

A)  NAFTA 
B)  Uruguay Round 
C)  World Trade Organization 
D)  non-tariff barriers 
E)  major free trade agreements of the 1990s 
A)  NAFTA 
B)  Uruguay Round 
C)  World Trade Organization 
D)  non-tariff barriers 
E)  major free trade agreements of the 1990s

Question 13

An important insight of international trade theory is that when two countries engage in voluntary trade

Accepted Answer

A)  one country always benefits at the expense of the other. 
B)  it is almost always beneficial to both countries. 
C)  it only benefits the low wage country. 
D)  it only benefits the high wage country. 
E)  it is almost never beneficial to both countries. 
A)  one country always benefits at the expense of the other. 
B)  it is almost always beneficial to both countries. 
C)  it only benefits the low wage country. 
D)  it only benefits the high wage country. 
E)  it is almost never beneficial to both countries.

Question 14

International capital markets experience a kind of risk not faced in domestic capital markets, namely

Accepted Answer

A)  "economic meltdown" risk. 
B)  Flood and hurricane crisis risk. 
C)  the risk of unexpected downgrading of assets by Standard and Poor. 
D)  the risk of exchange rate fluctuations. 
E)  the risk of political upheaval. 
A)  "economic meltdown" risk. 
B)  Flood and hurricane crisis risk. 
C)  the risk of unexpected downgrading of assets by Standard and Poor. 
D)  the risk of exchange rate fluctuations. 
E)  the risk of political upheaval.

Question 15

The distinction between international trade and international money is NOT entirely clear because

Accepted Answer

A)  real developments in the trade accounts do not have monetary implications. 
B)  the balance of payments includes only real measures. 
C)  developments caused by purely monetary changes have no real effects. 
D)  trade models focus on real, or barter relationships. 
E)  most international trade involves monetary transactions. 
A)  real developments in the trade accounts do not have monetary implications. 
B)  the balance of payments includes only real measures. 
C)  developments caused by purely monetary changes have no real effects. 
D)  trade models focus on real, or barter relationships. 
E)  most international trade involves monetary transactions.

Question 16

A fundamental problem in international economics is how to produce

Accepted Answer

A)  a perfect degree of monetary harmony. 
B)  an acceptable degree of harmony among the international trade policies of different countries. 
C)  a world government that can harmonize trade and monetary policies 
D)  a counter-cyclical monetary policy so that all countries will not be adversely affected by a financial crisis in one country. 
E)  a worldwide form of currency. 
A)  a perfect degree of monetary harmony. 
B)  an acceptable degree of harmony among the international trade policies of different countries. 
C)  a world government that can harmonize trade and monetary policies 
D)  a counter-cyclical monetary policy so that all countries will not be adversely affected by a financial crisis in one country. 
E)  a worldwide form of currency.

Question 17

Since 1994, trade rules have been enforced by

Accepted Answer

A)  the WTO. 
B)  the G10. 
C)  the GATT. 
D)  The U.S. Congress. 
E)  the European Union. 
A)  the WTO. 
B)  the G10. 
C)  the GATT. 
D)  The U.S. Congress. 
E)  the European Union.

Which of the following is NOT a major concern of international economic theory?

In 1998 an economic and financial crisis in South Korea caused it to experience

Who sells what to whom

After World War II, the United States has pursued a broad policy of

If there are large disparities in wage levels between countries, then

The balance of payments has become a central issue for the United States because

From 1950 to 2015

The GATT is

The international capital market is

The international financial crisis of 2007 was the result of

Trade theorists have proven that the gains from international trade

Which of the following does NOT belong?

An important insight of international trade theory is that when two countries engage in voluntary trade

International capital markets experience a kind of risk not faced in domestic capital markets, namely

The distinction between international trade and international money is NOT entirely clear because

A fundamental problem in international economics is how to produce

Since 1994, trade rules have been enforced by

World Trade: an Overview

Labor Productivity and Comparative Advantage: the Ricardian Model

Specific Factors and Income Distribution

Resources and Trade: the Heckscher-Ohlin Model

The Standard Trade Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises

The Instruments of Trade Policy

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Controversies in Trade Policy

National Income Accounting and the Balance of Payments

Exchange Rates and the Foreign Exchange Market: an Asset Approach

Money, Interest Rates, and Exchange Rates

Price Levels and the Exchange Rate in the Long Run

Output and the Exchange Rate in the Short Run

Fixed Exchange Rates and Foreign Exchange Intervention

International Monetary Systems: an Historical Overview

Financial Globalization: Opportunity and Crisis

Optimum Currency Areas and the Euro

Developing Countries: Growth, Crisis, and Reform

Filters

Exam 1: Introduction

Which of the following is NOT a major concern of international economic theory?

In 1998 an economic and financial crisis in South Korea caused it to experience

Who sells what to whom

After World War II, the United States has pursued a broad policy of

If there are large disparities in wage levels between countries, then

The balance of payments has become a central issue for the United States because

From 1950 to 2015

The GATT is

The international capital market is

The international financial crisis of 2007 was the result of

Trade theorists have proven that the gains from international trade

Which of the following does NOT belong?

An important insight of international trade theory is that when two countries engage in voluntary trade

International capital markets experience a kind of risk not faced in domestic capital markets, namely

The distinction between international trade and international money is NOT entirely clear because

A fundamental problem in international economics is how to produce

Since 1994, trade rules have been enforced by

World Trade: an Overview

Labor Productivity and Comparative Advantage: the Ricardian Model

Specific Factors and Income Distribution

Resources and Trade: the Heckscher-Ohlin Model

The Standard Trade Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises

The Instruments of Trade Policy

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Controversies in Trade Policy

National Income Accounting and the Balance of Payments

Exchange Rates and the Foreign Exchange Market: an Asset Approach

Money, Interest Rates, and Exchange Rates

Price Levels and the Exchange Rate in the Long Run

Output and the Exchange Rate in the Short Run

Fixed Exchange Rates and Foreign Exchange Intervention

International Monetary Systems: an Historical Overview

Financial Globalization: Opportunity and Crisis

Optimum Currency Areas and the Euro

Developing Countries: Growth, Crisis, and Reform

Filters