Question 1

Which famous economist is credited with the idea of comparative advantage?

Accepted Answer

A) Adam Smith 
B) David Ricardo 
C) John Maynard Keynes 
D) Milton Friedman 
A) Adam Smith 
B) David Ricardo 
C) John Maynard Keynes 
D) Milton Friedman

Question 2

What are the two basic characteristics of public goods?

Accepted Answer

A) nonexclusivity and nonrivalry 
B) exclusivity and nonrivalry 
C) exclusivity and rivalry 
D) collectivity and rivalry 
A) nonexclusivity and nonrivalry 
B) exclusivity and nonrivalry 
C) exclusivity and rivalry 
D) collectivity and rivalry

Question 3

According to the mercantilist school of thought, how can states maximize their wealth and welfare?

Accepted Answer

A) by playing an active role in the economy and accumulating resources 
B) by letting the "invisible hand" control economic decisions 
C) by opening trade borders and removing barriers to trade 
D) by focusing on industries in which they have a comparative advantage 
A) by playing an active role in the economy and accumulating resources 
B) by letting the "invisible hand" control economic decisions 
C) by opening trade borders and removing barriers to trade 
D) by focusing on industries in which they have a comparative advantage

Question 4

We're always encouraged to "buy domestic." It is politically popular to support policies that limit import competition and reduce the number of jobs that are outsourced to other countries. According to liberal economic trade theory, however, these policies and the accompanying encouragement to buy domestic-made goods are actually harming our overall welfare in the long run. Explain why liberal theory knows this to be true. Do you agree with the conclusions of liberal theory? If not, why?

Accepted Answer

Liberal economic trade theory argues tha

Question 5

What does the difference between growth rates in trade and gross domestic product (GDP)represent?

Accepted Answer

A) trade integration 
B) trade deficit 
C) trade surplus 
D) balance of trade 
A) trade integration 
B) trade deficit 
C) trade surplus 
D) balance of trade

Question 6

Which of the following best describes comparative advantage?

Accepted Answer

A) If a state can produce the highest volume of wool in the world, that state should produce wool regardless of opportunity cost. 
B) If a state can produce equal amounts of wine and wool, that state should produce whichever good is more expensive and desirable in the global economy. 
C) If a state can produce wine at a lower opportunity cost than wool, that state should produce wine even if it could produce more wool than any other state in the world. 
D) States should avoid producing wine, as wool is a more valuable resource to the economy. 
A) If a state can produce the highest volume of wool in the world, that state should produce wool regardless of opportunity cost. 
B) If a state can produce equal amounts of wine and wool, that state should produce whichever good is more expensive and desirable in the global economy. 
C) If a state can produce wine at a lower opportunity cost than wool, that state should produce wine even if it could produce more wool than any other state in the world. 
D) States should avoid producing wine, as wool is a more valuable resource to the economy.

Question 7

Which GATT principle calls for mutual lowering of trade barriers between trading partners?

Accepted Answer

A) reciprocity 
B) convertibility 
C) nondiscrimination 
D) outsourcing 
A) reciprocity 
B) convertibility 
C) nondiscrimination 
D) outsourcing

Question 8

Global trade integration has become most rapid as a result of the increasing trade participation of states from which region?

Accepted Answer

A) Global North 
B) Global South 
C) Latin America 
D) Southeast Asia 
A) Global North 
B) Global South 
C) Latin America 
D) Southeast Asia

Question 9

According to hegemonic stability theory, what do hegemons provide?

Accepted Answer

A) a world government 
B) multilateral politics 
C) public goods 
D) common goods 
A) a world government 
B) multilateral politics 
C) public goods 
D) common goods

Question 10

What do the liberal economic theory and empirical evidence show regarding the effects of outsourcing?

Accepted Answer

A) Even if outsourcing decreases the wage levels of some states, the decreasing wage level is offset by an increase in purchasing power. 
B) Even if outsourcing decreases the wage levels of some states, low wage levels tend to result in high levels of unemployment. 
C) Even if outsourcing decreases the wage levels of some states, inflation tends to occur in globalized states. 
D) Even if outsourcing decreases the wage levels of some states, in the long run, there is no incentive for companies to hire domestic labor. 
A) Even if outsourcing decreases the wage levels of some states, the decreasing wage level is offset by an increase in purchasing power. 
B) Even if outsourcing decreases the wage levels of some states, low wage levels tend to result in high levels of unemployment. 
C) Even if outsourcing decreases the wage levels of some states, inflation tends to occur in globalized states. 
D) Even if outsourcing decreases the wage levels of some states, in the long run, there is no incentive for companies to hire domestic labor.

Question 11

Which GATT principle of nondiscrimination calls for all foreign goods to be treated equally with domestic goods, and prevents countries from enacting policies, such as taxes, to give their products an advantage over foreign products?

Accepted Answer

A) national treatment 
B) most-favored-nation status 
C) transparency 
D) liberalization 
A) national treatment 
B) most-favored-nation status 
C) transparency 
D) liberalization

Question 12

Which policy refers to government support for particular domestic industries to help them gain competitive advantages over foreign producers?

Accepted Answer

A) domestic subsidies 
B) import substitution 
C) antidumping policy 
D) strategic trade policy 
A) domestic subsidies 
B) import substitution 
C) antidumping policy 
D) strategic trade policy

Question 13

Imagine that a country requires imported bananas to be of certain size and curvature. A reasonable observer might conclude that such a preposterous requirement constitutes which of the following?

Accepted Answer

A) an agricultural policy 
B) a subsidy 
C) a nontariff barrier 
D) an antidumping duty 
A) an agricultural policy 
B) a subsidy 
C) a nontariff barrier 
D) an antidumping duty

Question 14

What is a country pursuing if it chooses to produce oil because it has large oil reserves and world's lowest production costs?

Accepted Answer

A) comparative advantage 
B) absolute advantage 
C) laissez-faire capitalism 
D) diminishing returns 
A) comparative advantage 
B) absolute advantage 
C) laissez-faire capitalism 
D) diminishing returns

Question 15

Which of the following is a particularity contentious aspect of globalization?

Accepted Answer

A) globalization of labor 
B) globalization of capital 
C) trade 
D) intra-firm trade 
A) globalization of labor 
B) globalization of capital 
C) trade 
D) intra-firm trade

Question 16

What was the primary goal of the GATT?

Accepted Answer

A) to provide a forum for countries to coordinate their tariffs, imposts, and excises 
B) to encourage free trade among countries by reducing trade barriers 
C) to facilitate free flow of labor 
D) to facilitate free flow of capital 
A) to provide a forum for countries to coordinate their tariffs, imposts, and excises 
B) to encourage free trade among countries by reducing trade barriers 
C) to facilitate free flow of labor 
D) to facilitate free flow of capital

Question 17

Globalization of labor is a very controversial issue. Why do so many people fear it? What do the studies indicate? Are MNCs an integral component of this issue? What are the pros and cons of MNCs? Explanation should include issues such as child labor, immigration, slave labor, and unions.

Accepted Answer

Globalization of labor is a controversia

Question 18

What was the impact of the 2008 financial crisis on world trade?

Accepted Answer

A) World trade fell by 45 percent in 2008. 
B) The decrease in trade was steeper and more sudden than the drop that accompanied the Great Depression. 
C) The countries affected by the crisis turned to protectionism. 
D) Global trade continued as before. 
A) World trade fell by 45 percent in 2008. 
B) The decrease in trade was steeper and more sudden than the drop that accompanied the Great Depression. 
C) The countries affected by the crisis turned to protectionism. 
D) Global trade continued as before.

Question 19

Which of the following are agreements in which exporting countries agree to restrict shipments of a particular product to a country to deter it from imposing an even more onerous import quota?

Accepted Answer

A) orderly market arrangements 
B) nontariff barriers 
C) export quotas 
D) voluntary export restrictions 
A) orderly market arrangements 
B) nontariff barriers 
C) export quotas 
D) voluntary export restrictions

Question 20

Compare and contrast liberalism and mercantilism. What are the strengths and weaknesses of each theoretical approach? Which do you believe states should follow? Why?

Accepted Answer

Liberalism and mercantilism are two cont

Which famous economist is credited with the idea of comparative advantage?

What are the two basic characteristics of public goods?

According to the mercantilist school of thought, how can states maximize their wealth and welfare?

What does the difference between growth rates in trade and gross domestic product (GDP)represent?

Which of the following best describes comparative advantage?

Which GATT principle calls for mutual lowering of trade barriers between trading partners?

Global trade integration has become most rapid as a result of the increasing trade participation of states from which region?

According to hegemonic stability theory, what do hegemons provide?

What do the liberal economic theory and empirical evidence show regarding the effects of outsourcing?

Which GATT principle of nondiscrimination calls for all foreign goods to be treated equally with domestic goods, and prevents countries from enacting policies, such as taxes, to give their products an advantage over foreign products?

Which policy refers to government support for particular domestic industries to help them gain competitive advantages over foreign producers?

Imagine that a country requires imported bananas to be of certain size and curvature. A reasonable observer might conclude that such a preposterous requirement constitutes which of the following?

What is a country pursuing if it chooses to produce oil because it has large oil reserves and world's lowest production costs?

Which of the following is a particularity contentious aspect of globalization?

What was the primary goal of the GATT?

Globalization of labor is a very controversial issue. Why do so many people fear it? What do the studies indicate? Are MNCs an integral component of this issue? What are the pros and cons of MNCs? Explanation should include issues such as child labor, immigration, slave labor, and unions.

What was the impact of the 2008 financial crisis on world trade?

Which of the following are agreements in which exporting countries agree to restrict shipments of a particular product to a country to deter it from imposing an even more onerous import quota?

Compare and contrast liberalism and mercantilism. What are the strengths and weaknesses of each theoretical approach? Which do you believe states should follow? Why?

Discovering World Politics

Interpreting World Politics Through the Lens of Theory

Theories of International Decision Making

Great Power Relations and Rivalries

World Politics and the Global South

Non-State Actors and the Quest for Global Community

The Threat of Armed Conflict to the World

The Pursuit of Power Through Arms and Alliances

The Quest for Peace Through International Law and Collective Security

The Globalization of International Finance

The Demographic and Cultural Dimensions of Globalization

The Promotion of Human Development and Human Rights

Global Responsibility for the Preservation of the Environment

Looking Ahead at Global Trends and Transformations

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Exam 11: International Trade in the Global Marketplace

Which famous economist is credited with the idea of comparative advantage?

What are the two basic characteristics of public goods?

According to the mercantilist school of thought, how can states maximize their wealth and welfare?

What does the difference between growth rates in trade and gross domestic product (GDP)represent?

Which of the following best describes comparative advantage?

Which GATT principle calls for mutual lowering of trade barriers between trading partners?

Global trade integration has become most rapid as a result of the increasing trade participation of states from which region?

According to hegemonic stability theory, what do hegemons provide?

What do the liberal economic theory and empirical evidence show regarding the effects of outsourcing?

Which GATT principle of nondiscrimination calls for all foreign goods to be treated equally with domestic goods, and prevents countries from enacting policies, such as taxes, to give their products an advantage over foreign products?

Which policy refers to government support for particular domestic industries to help them gain competitive advantages over foreign producers?

Imagine that a country requires imported bananas to be of certain size and curvature. A reasonable observer might conclude that such a preposterous requirement constitutes which of the following?

What is a country pursuing if it chooses to produce oil because it has large oil reserves and world's lowest production costs?

Which of the following is a particularity contentious aspect of globalization?

What was the primary goal of the GATT?

Globalization of labor is a very controversial issue. Why do so many people fear it? What do the studies indicate? Are MNCs an integral component of this issue? What are the pros and cons of MNCs? Explanation should include issues such as child labor, immigration, slave labor, and unions.

What was the impact of the 2008 financial crisis on world trade?

Which of the following are agreements in which exporting countries agree to restrict shipments of a particular product to a country to deter it from imposing an even more onerous import quota?

Compare and contrast liberalism and mercantilism. What are the strengths and weaknesses of each theoretical approach? Which do you believe states should follow? Why?

Discovering World Politics

Interpreting World Politics Through the Lens of Theory

Theories of International Decision Making

Great Power Relations and Rivalries

World Politics and the Global South

Non-State Actors and the Quest for Global Community

The Threat of Armed Conflict to the World

The Pursuit of Power Through Arms and Alliances

The Quest for Peace Through International Law and Collective Security

The Globalization of International Finance

The Demographic and Cultural Dimensions of Globalization

The Promotion of Human Development and Human Rights

Global Responsibility for the Preservation of the Environment

Looking Ahead at Global Trends and Transformations

Filters