Question 1

Transfers to foreigners represent gifts from the domestic country to the foreign country.

Accepted Answer

A) True 
 B)False

Question 2

As the real interest rate ________,net capital outflows ________.

Accepted Answer

A)  increases; increase 
B)  decreases; decrease 
C)  increases; decrease 
D)  decreases; remain unchanged 
A)  increases; increase 
B)  decreases; decrease 
C)  increases; decrease 
D)  decreases; remain unchanged

Question 3

Which of the following is most likely to discourage international trade?

Accepted Answer

A)  Lower income tax rates 
B)  Higher export subsidies 
C)  Higher import tariffs 
D)  Lower interest rates 
A)  Lower income tax rates 
B)  Higher export subsidies 
C)  Higher import tariffs 
D)  Lower interest rates

Question 4

Scenario: Mark can make three tables and one chair in a day, while John can make four tables and one chair in a day.
-Refer to the scenario above.Which of the following is true in this case?

Accepted Answer

A)  John should specialize in making tables, because he has a lower opportunity cost of producing them. 
B)  John should specialize in making chairs, because he has a lower opportunity cost of producing them. 
C)  John should specialize in making tables, because he has a greater opportunity cost of producing them. 
D)  John should specialize in making chairs, because he has a greater opportunity cost of producing them. 
A)  John should specialize in making tables, because he has a lower opportunity cost of producing them. 
B)  John should specialize in making chairs, because he has a lower opportunity cost of producing them. 
C)  John should specialize in making tables, because he has a greater opportunity cost of producing them. 
D)  John should specialize in making chairs, because he has a greater opportunity cost of producing them.

Question 5

Comparative advantage alone is sufficient for individuals to receive gains from specialization.

Accepted Answer

A) True 
 B)False

Question 6

Differentiate between a closed economy and an open economy.

Accepted Answer

A closed economy does not trad

Question 7

List all the sources of income-based payments to foreigners.

Accepted Answer

The different sources of income-based pa

Question 8

A country imported goods and services worth $16 billion and exported goods and services worth $18.2 billion during a particular year.The country's trade ________ equals ________.

Accepted Answer

A)  deficit; $2.2 billion 
B)  deficit; $16 billion 
C)  surplus; $2.2 billion 
D)  surplus; $18.2 billion 
A)  deficit; $2.2 billion 
B)  deficit; $16 billion 
C)  surplus; $2.2 billion 
D)  surplus; $18.2 billion

Question 9

A leading apparel brand in the United States opens a workshop in Bangladesh.This is an example of a(n)________.

Accepted Answer

A)  export to Bangladesh 
B)  import by the United States 
C)  foreign direct investment in Bangladesh 
D)  foreign portfolio investment in Bangladesh 
A)  export to Bangladesh 
B)  import by the United States 
C)  foreign direct investment in Bangladesh 
D)  foreign portfolio investment in Bangladesh

Question 10

An economy that does not trade with the rest of the world is known as a(n)________ economy.

Accepted Answer

A)  open 
B)  closed 
C)  command 
D)  communist 
A)  open 
B)  closed 
C)  command 
D)  communist

Question 11

Why do the governments of some developing countries use tariffs to raise revenue?

Accepted Answer

Governments in some developing countries

Question 12

The table below shows the quantities of rice and wheat that two countries can produce in a year if they specialize in the production of each good.
  
-Refer to the table above.Which of the following statements is true in this case?

Accepted Answer

A)  Country X has an absolute advantage in the production of wheat. 
B)  Country X has an absolute advantage in the production of rice. 
C)  Country Y has a comparative advantage in the production of rice. 
D)  Country Y has a comparative advantage in the production of wheat. 
A)  Country X has an absolute advantage in the production of wheat. 
B)  Country X has an absolute advantage in the production of rice. 
C)  Country Y has a comparative advantage in the production of rice. 
D)  Country Y has a comparative advantage in the production of wheat.

Question 13

The opportunity cost of producing a laptop is lower in Country Y than in Country X,while the opportunity cost of producing wheat is lower in Country X than in Country Y.However,Country Y can produce more of both goods.
a)Can mutually beneficial trade take place between the two countries? Explain your answer.
b)Which country should specialize in the production of which good?

Accepted Answer

a)Mutually beneficial trade can take pla

Question 14

Scenario: The table below shows the payments received from foreigners by the residents of Country Y and the payments made to foreigners by the residents of Country Y during a certain year.
  
-Refer to the scenario above.Based on this information,we can conclude that Country Y has a ________.

Accepted Answer

A)  budget deficit 
B)  trade surplus 
C)  current account deficit 
D)  current account surplus 
A)  budget deficit 
B)  trade surplus 
C)  current account deficit 
D)  current account surplus

Question 15

Factor payments from foreigners represent gifts from foreign residents or governments.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is true of tariffs?

Accepted Answer

A)  They encourage international trade. 
B)  They are special taxes levied on exports. 
C)  They reduce the volume of imports. 
D)  They decrease the prices of exports. 
A)  They encourage international trade. 
B)  They are special taxes levied on exports. 
C)  They reduce the volume of imports. 
D)  They decrease the prices of exports.

Transfers to foreigners represent gifts from the domestic country to the foreign country.

As the real interest rate ,net capital outflows .

Which of the following is most likely to discourage international trade?

Scenario: Mark can make three tables and one chair in a day, while John can make four tables and one chair in a day. -Refer to the scenario above.Which of the following is true in this case?

Comparative advantage alone is sufficient for individuals to receive gains from specialization.

Differentiate between a closed economy and an open economy.

List all the sources of income-based payments to foreigners.

A country imported goods and services worth $16 billion and exported goods and services worth $18.2 billion during a particular year.The country's trade equals .

A leading apparel brand in the United States opens a workshop in Bangladesh.This is an example of a(n)________.

An economy that does not trade with the rest of the world is known as a(n)________ economy.

Why do the governments of some developing countries use tariffs to raise revenue?

The table below shows the quantities of rice and wheat that two countries can produce in a year if they specialize in the production of each good. -Refer to the table above.Which of the following statements is true in this case?

Scenario: The table below shows the payments received from foreigners by the residents of Country Y and the payments made to foreigners by the residents of Country Y during a certain year. -Refer to the scenario above.Based on this information,we can conclude that Country Y has a ________.

Factor payments from foreigners represent gifts from foreign residents or governments.

Which of the following is true of tariffs?

The Principles and Practice of Economics

Economic Methods and Economic Questions

Optimization: Doing the Best You Can

Demand, Supply, and Equilibrium

The Wealth of Nations: Defining and Measuring Macroeconomic Aggregates

Aggregate Incomes

Economic Growth

Why Isn't the Whole World Developed?

Employment and Unemployment

Credit Markets

The Monetary System

Short-Run Fluctuations

Countercyclical Macroeconomic Policy

Open Economy Macroeconomics

Filters

Exam 14: Macroeconomics and International Trade

Transfers to foreigners represent gifts from the domestic country to the foreign country.

As the real interest rate ________,net capital outflows ________.

Which of the following is most likely to discourage international trade?

Scenario: Mark can make three tables and one chair in a day, while John can make four tables and one chair in a day. -Refer to the scenario above.Which of the following is true in this case?

Comparative advantage alone is sufficient for individuals to receive gains from specialization.

Differentiate between a closed economy and an open economy.

List all the sources of income-based payments to foreigners.

A country imported goods and services worth $16 billion and exported goods and services worth $18.2 billion during a particular year.The country's trade ________ equals ________.

A leading apparel brand in the United States opens a workshop in Bangladesh.This is an example of a(n)________.

An economy that does not trade with the rest of the world is known as a(n)________ economy.

Why do the governments of some developing countries use tariffs to raise revenue?

The table below shows the quantities of rice and wheat that two countries can produce in a year if they specialize in the production of each good. -Refer to the table above.Which of the following statements is true in this case?

Scenario: The table below shows the payments received from foreigners by the residents of Country Y and the payments made to foreigners by the residents of Country Y during a certain year. -Refer to the scenario above.Based on this information,we can conclude that Country Y has a ________.

Factor payments from foreigners represent gifts from foreign residents or governments.

Which of the following is true of tariffs?

The Principles and Practice of Economics

Economic Methods and Economic Questions

Optimization: Doing the Best You Can

Demand, Supply, and Equilibrium

The Wealth of Nations: Defining and Measuring Macroeconomic Aggregates

Aggregate Incomes

Economic Growth

Why Isn't the Whole World Developed?

Employment and Unemployment

Credit Markets

The Monetary System

Short-Run Fluctuations

Countercyclical Macroeconomic Policy

Open Economy Macroeconomics

Filters

As the real interest rate ,net capital outflows .

A country imported goods and services worth $16 billion and exported goods and services worth $18.2 billion during a particular year.The country's trade equals .