Question 1

In which of the following countries did exports account for the biggest percentage of GDP in 2014?

Accepted Answer

A) Japan 
B) United States 
C) Netherlands 
D) Germany 
A) Japan 
B) United States 
C) Netherlands 
D) Germany

Question 2

The "eurozone"

Accepted Answer

A) is another name for the European Union. 
B) refers to the common currency used by all European Union members. 
C) is a geographic region in Europe with no national sovereignty, where free trade between European nations is allowed to occur. 
D) is the subset of the EU that uses a common currency. 
A) is another name for the European Union. 
B) refers to the common currency used by all European Union members. 
C) is a geographic region in Europe with no national sovereignty, where free trade between European nations is allowed to occur. 
D) is the subset of the EU that uses a common currency.

Question 3

In effect, tariffs on imports are

Accepted Answer

A) special taxes on domestic producers. 
B) subsidies to domestic consumers. 
C) subsidies to foreign producers. 
D) subsidies for domestic producers. 
A) special taxes on domestic producers. 
B) subsidies to domestic consumers. 
C) subsidies to foreign producers. 
D) subsidies for domestic producers.

Question 4

Which of the following is a valid counterargument to the call for higher tariffs to save U.S.jobs?

Accepted Answer

A) U.S.firms and workers must be protected from the cheaper labor in nations where wages are low. 
B) All nations cannot simultaneously succeed in restricting imports while maintaining exports. 
C) Reducing tariffs will benefit all consumers and domestic producers. 
D) The need to protect U.S.workers from unemployment is not a concern in international economics. 
A) U.S.firms and workers must be protected from the cheaper labor in nations where wages are low. 
B) All nations cannot simultaneously succeed in restricting imports while maintaining exports. 
C) Reducing tariffs will benefit all consumers and domestic producers. 
D) The need to protect U.S.workers from unemployment is not a concern in international economics.

Question 5

In a world with two products, wheat (W) and coffee (C), nation Alpha produces wheat and nation Beta produces coffee.Nation Alpha prefers an exchange rate of 1W = 2C, and nation Beta prefers an exchange rate of 1W = 1C.The exchange rate preferred by nation

Accepted Answer

A) Alpha will prevail if world demand for coffee is great relative to its supply. 
B) Alpha will prevail if world demand for wheat is weak relative to its supply. 
C) Beta will prevail if world demand for coffee is great relative to its supply. 
D) Beta will prevail if world demand for wheat is great relative to its supply. 
A) Alpha will prevail if world demand for coffee is great relative to its supply. 
B) Alpha will prevail if world demand for wheat is weak relative to its supply. 
C) Beta will prevail if world demand for coffee is great relative to its supply. 
D) Beta will prevail if world demand for wheat is great relative to its supply.

Question 6

NAFTA

Accepted Answer

A) has increased the standard of living in the North African member nations. 
B) benefits workers in the participating nations but hurts consumers by raising prices. 
C) allows completely unrestricted movement of goods, services, and resources between the member nations. 
D) has reduced most trade barriers between Canada, Mexico, and the United States. 
A) has increased the standard of living in the North African member nations. 
B) benefits workers in the participating nations but hurts consumers by raising prices. 
C) allows completely unrestricted movement of goods, services, and resources between the member nations. 
D) has reduced most trade barriers between Canada, Mexico, and the United States.

Question 7

Dumping is the sale of a product in a foreign market

Accepted Answer

A) at a price below its domestic price or cost of production. 
B) that does not meet the quality standards in the domestic market. 
C) and is the principal means used to enforce nontariff barriers. 
D) and is encouraged by voluntary export restraints. 
A) at a price below its domestic price or cost of production. 
B) that does not meet the quality standards in the domestic market. 
C) and is the principal means used to enforce nontariff barriers. 
D) and is encouraged by voluntary export restraints.

Question 8

Which of the following statements is true?

Accepted Answer

A) Comparative advantage means that total world output will be greatest when each good is produced by the nation that has the highest domestic opportunity cost of producing it. 
B) Comparative advantage means that a nation can gain from trade only if it has a lower labor productivity than its trading partner. 
C) Specialization will be complete among nations when opportunity costs increase as the nations produce more of a particular product. 
D) Specialization will be less than complete among nations when opportunity costs increase as the nations produce more of a particular product. 
A) Comparative advantage means that total world output will be greatest when each good is produced by the nation that has the highest domestic opportunity cost of producing it. 
B) Comparative advantage means that a nation can gain from trade only if it has a lower labor productivity than its trading partner. 
C) Specialization will be complete among nations when opportunity costs increase as the nations produce more of a particular product. 
D) Specialization will be less than complete among nations when opportunity costs increase as the nations produce more of a particular product.

Question 9

In terms of trade volume in the past many years, China has been the largest trading partner of the United States.

Accepted Answer

A) True 
 B)False

Question 10

The ratio at which nations will exchange one product for another is known as the

Accepted Answer

A) exchange rate. 
B) discount rate. 
C) terms of trade. 
D) balance of trade. 
A) exchange rate. 
B) discount rate. 
C) terms of trade. 
D) balance of trade.

Question 11

Trade adjustment assistance

Accepted Answer

A) provides financial assistance to all unemployed workers in the United States. 
B) guarantees jobs for all workers displaced by imports or plant relocations abroad. 
C) provides assistance to about 20 percent of unemployed U.S.workers each year. 
D) provides cash assistance for workers displaced by imports or plant relocations abroad. 
A) provides financial assistance to all unemployed workers in the United States. 
B) guarantees jobs for all workers displaced by imports or plant relocations abroad. 
C) provides assistance to about 20 percent of unemployed U.S.workers each year. 
D) provides cash assistance for workers displaced by imports or plant relocations abroad.

Question 12

The World Trade Organization was established by the United States to force other nations to open their markets to U.S.goods.

Accepted Answer

A) True 
 B)False

Question 13

Answer the question using the accompanying cost ratios for two products, fish (F) and chicken (C), in countries Singsong and Harmony.Assume that production occurs under conditions of constant costs and that these are the only two nations in the world.Singsong: 1F = 2C Harmony: 1F = 4C
Which one of the following would not be feasible terms for trade between Singsong and Harmony?

Accepted Answer

A) 1 fish for 2½ chicken 
B) 1 fish for 3 chicken 
C) 1 chicken for 1/5 of a fish 
D) 1 chicken for 1/3 of a fish 
A) 1 fish for 2½ chicken 
B) 1 fish for 3 chicken 
C) 1 chicken for 1/5 of a fish 
D) 1 chicken for 1/3 of a fish

Question 14

Among the principal exports of the United States are agricultural products.

Accepted Answer

A) True 
 B)False

Question 15

Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X.By devoting all its resources to Y, Alpha can produce 60Y.Comparable figures for nation Beta are
60X and 40Y.The terms of trade will be at or within the 1X = 1½Y to 1X = ⅔Y range.

Accepted Answer

A) True 
 B)False

Question 16

Trade adjustment assistance provides subsidies to companies that have lost business to foreign firms.

Accepted Answer

A) True 
 B)False

Question 17

If a nation has a comparative advantage in the production of X, this means the nation

Accepted Answer

A) cannot benefit by producing and trading this product. 
B) must give up less of other goods than other nations in producing a unit of X. 
C) has a production possibilities curve identical to those of other nations. 
D) is not subject to increasing opportunity costs. 
A) cannot benefit by producing and trading this product. 
B) must give up less of other goods than other nations in producing a unit of X. 
C) has a production possibilities curve identical to those of other nations. 
D) is not subject to increasing opportunity costs.

Question 18

Economists who criticize trade adjustment assistance argue that

Accepted Answer

A) it only benefits a small fraction of all unemployed workers. 
B) money spent on the program overstimulates aggregate demand and threatens to cause inflation. 
C) benefits are too low to provide unemployed workers with a livable wage. 
D) it distorts patterns of foreign trade, reducing the gains from trade. 
A) it only benefits a small fraction of all unemployed workers. 
B) money spent on the program overstimulates aggregate demand and threatens to cause inflation. 
C) benefits are too low to provide unemployed workers with a livable wage. 
D) it distorts patterns of foreign trade, reducing the gains from trade.

Question 19

Other things equal, a tariff is

Accepted Answer

A) superior to an import quota for Americans because a tariff increases the profits of foreign producers. 
B) inferior to an import quota for Americans because a tariff increases the profits of domestic producers. 
C) superior to an import quota for Americans because a tariff generates revenue for the U.S.Treasury. 
D) inferior to an import quota for Americans because a tariff generates revenue for the U.S.Treasury. 
A) superior to an import quota for Americans because a tariff increases the profits of foreign producers. 
B) inferior to an import quota for Americans because a tariff increases the profits of domestic producers. 
C) superior to an import quota for Americans because a tariff generates revenue for the U.S.Treasury. 
D) inferior to an import quota for Americans because a tariff generates revenue for the U.S.Treasury.

Question 20

When a tariff or quota on a product is removed, this policy action

Accepted Answer

A) benefits domestic producers of the product. 
B) benefits consumers of the product. 
C) benefits the government. 
D) hurts nations exporting the product. 
A) benefits domestic producers of the product. 
B) benefits consumers of the product. 
C) benefits the government. 
D) hurts nations exporting the product.

Exam 40: International Trade

In which of the following countries did exports account for the biggest percentage of GDP in 2014?

The "eurozone"

In effect, tariffs on imports are

Which of the following is a valid counterargument to the call for higher tariffs to save U.S.jobs?

In a world with two products, wheat (W) and coffee (C), nation Alpha produces wheat and nation Beta produces coffee.Nation Alpha prefers an exchange rate of 1W = 2C, and nation Beta prefers an exchange rate of 1W = 1C.The exchange rate preferred by nation

NAFTA

Dumping is the sale of a product in a foreign market

Which of the following statements is true?

In terms of trade volume in the past many years, China has been the largest trading partner of the United States.

The ratio at which nations will exchange one product for another is known as the

Trade adjustment assistance

The World Trade Organization was established by the United States to force other nations to open their markets to U.S.goods.

Among the principal exports of the United States are agricultural products.

Assume that by devoting all its resources to the production of X, nation Alpha can produce 40 units of X.By devoting all its resources to Y, Alpha can produce 60Y.Comparable figures for nation Beta are 60X and 40Y.The terms of trade will be at or within the 1X = 1½Y to 1X = ⅔Y range.

Trade adjustment assistance provides subsidies to companies that have lost business to foreign firms.

If a nation has a comparative advantage in the production of X, this means the nation

Economists who criticize trade adjustment assistance argue that

Other things equal, a tariff is

When a tariff or quota on a product is removed, this policy action

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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