Question 1

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. A

Question 2

For almost 70 years international trade policies have been governed

Accepted Answer

A)  by the World Trade Organization. 
B)  by the International Monetary Fund. 
C)  by the World. 
D)  by an international treaty known as the General Agreement on Tariffs and Trade (GATT). 
E)  by the North American Free Trade Agreement (NAFT
A) . 
A)  by the World Trade Organization. 
B)  by the International Monetary Fund. 
C)  by the World. 
D)  by an international treaty known as the General Agreement on Tariffs and Trade (GATT). 
E)  by the North American Free Trade Agreement (NAFT
A) . D

Question 3

Theories of international economics from the 18th and 19th Centuries are

Accepted Answer

A)  not relevant to current policy analysis. 
B)  only of moderate relevance in today's modern international economy. 
C)  highly relevant in today's modern international economy. 
D)  the only theories that actually relevant to modern international economy. 
E)  not well understood by modern mathematically oriented theorists. 
A)  not relevant to current policy analysis. 
B)  only of moderate relevance in today's modern international economy. 
C)  highly relevant in today's modern international economy. 
D)  the only theories that actually relevant to modern international economy. 
E)  not well understood by modern mathematically oriented theorists. C

Question 4

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 5

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 6

During the first three years of its existence,the euro

Accepted Answer

A)  depreciated against the $U.S. 
B)  maintained a strict parity with the $U.S. 
C)  strengthened against the $U.S. 
D)  proved to be an impossible dream. 
E)  exported exclusively to the U.S. 
A)  depreciated against the $U.S. 
B)  maintained a strict parity with the $U.S. 
C)  strengthened against the $U.S. 
D)  proved to be an impossible dream. 
E)  exported exclusively to the U.S.

Question 7

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.

Question 8

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 9

"Trade is generally harmful if there are large disparities between countries in wages."

Accepted Answer

A)  This is generally true. 
B)  This is generally false. 
C)  Trade theory has nothing to say about this issue. 
D)  This is true if the trade partner ignores child labor laws. 
E)  This is true if the trade partner uses prison labor. 
A)  This is generally true. 
B)  This is generally false. 
C)  Trade theory has nothing to say about this issue. 
D)  This is true if the trade partner ignores child labor laws. 
E)  This is true if the trade partner uses prison labor.

Question 10

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 11

Because the Constitution forbids restraints on interstate trade

Accepted Answer

A)  the U.S. may not impose tariffs on imports from NAFTA countries. 
B)  the U.S. may not affect the international value of the $ U.S. 
C)  the U.S. may not put restraints on foreign investments in California if it involves a financial intermediary in New York State. 
D)  the U.S. may not impose export duties. 
E)  the U.S. may not disrupt commerce between Florida and Hawaii. 
A)  the U.S. may not impose tariffs on imports from NAFTA countries. 
B)  the U.S. may not affect the international value of the $ U.S. 
C)  the U.S. may not put restraints on foreign investments in California if it involves a financial intermediary in New York State. 
D)  the U.S. may not impose export duties. 
E)  the U.S. may not disrupt commerce between Florida and Hawaii.

Question 12

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 13

The insight that patterns of trade are primarily determined by international differences in labor productivity was first proposed by

Accepted Answer

A)  Adam Smith. 
B)  David Hume. 
C)  David Ricardo. 
D)  Eli Heckscher. 
E)  Lerner and Samuelson. 
A)  Adam Smith. 
B)  David Hume. 
C)  David Ricardo. 
D)  Eli Heckscher. 
E)  Lerner and Samuelson.

Question 14

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 15

The euro,a common currency for most of the nations of Western Europe,was introduced

Accepted Answer

A)  before 1900. 
B)  before 1990. 
C)  before 2000. 
D)  in order to snub the pride of the U.S. 
E)  in order to fix currencies in terms of the U.S dollar. 
A)  before 1900. 
B)  before 1990. 
C)  before 2000. 
D)  in order to snub the pride of the U.S. 
E)  in order to fix currencies in terms of the U.S dollar.

Question 16

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 17

International Economists cannot discuss the effects of international trade or recommend changes in government policies toward trade with any confidence unless they know

Accepted Answer

A)  their theory is the best available. 
B)  their theory is internally consistent. 
C)  their theory passes the "reasonable person" legal criteria. 
D)  their theory is good enough to explain the international trade that is actually observed. 
E)  their theory accounts for China's unique position in international trade. 
A)  their theory is the best available. 
B)  their theory is internally consistent. 
C)  their theory passes the "reasonable person" legal criteria. 
D)  their theory is good enough to explain the international trade that is actually observed. 
E)  their theory accounts for China's unique position in international trade.

Question 18

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 19

The study of exchange rate determination is a relatively new part of international economics,since

Accepted Answer

A)  for much of the past century, exchange rates were fixed by government action. 
B)  the calculations required for this were not possible before modern computers became available. 
C)  economic theory developed by David Hume demonstrated that real exchange rates remain fixed over time. 
D)  dynamic overshooting asset pricing models are a recent theoretical development. 
E)  the exchange rate never fluctuates. 
A)  for much of the past century, exchange rates were fixed by government action. 
B)  the calculations required for this were not possible before modern computers became available. 
C)  economic theory developed by David Hume demonstrated that real exchange rates remain fixed over time. 
D)  dynamic overshooting asset pricing models are a recent theoretical development. 
E)  the exchange rate never fluctuates.

Question 20

It is argued that if a rich high wage country such as the United States were to expand trade with a relatively poor and low wage country such as Mexico,then U.S.industry would migrate south,and U.S.wages would fall to the level of Mexico's.What do you think about this argument?

Accepted Answer

The student may think anything

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

For almost 70 years international trade policies have been governed

Theories of international economics from the 18th and 19th Centuries are

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

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

During the first three years of its existence,the euro

Since 1994,trade rules have been enforced by

Which of the following does NOT belong?

"Trade is generally harmful if there are large disparities between countries in wages."

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

Because the Constitution forbids restraints on interstate trade

The international financial crisis of 2007 was the result of

The insight that patterns of trade are primarily determined by international differences in labor productivity was first proposed by

A fundamental problem in international economics is how to produce

The euro,a common currency for most of the nations of Western Europe,was introduced

Trade theorists have proven that the gains from international trade

International Economists cannot discuss the effects of international trade or recommend changes in government policies toward trade with any confidence unless they know

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

The study of exchange rate determination is a relatively new part of international economics,since

It is argued that if a rich high wage country such as the United States were to expand trade with a relatively poor and low wage country such as Mexico,then U.S.industry would migrate south,and U.S.wages would fall to the level of Mexico's.What do you think about this argument?

National Income Accounting and the Balance of Payments

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

Filters

Exam 1: Introduction

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

For almost 70 years international trade policies have been governed

Theories of international economics from the 18th and 19th Centuries are

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

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

During the first three years of its existence,the euro

Since 1994,trade rules have been enforced by

Which of the following does NOT belong?

"Trade is generally harmful if there are large disparities between countries in wages."

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

Because the Constitution forbids restraints on interstate trade

The international financial crisis of 2007 was the result of

The insight that patterns of trade are primarily determined by international differences in labor productivity was first proposed by

A fundamental problem in international economics is how to produce

The euro,a common currency for most of the nations of Western Europe,was introduced

Trade theorists have proven that the gains from international trade

International Economists cannot discuss the effects of international trade or recommend changes in government policies toward trade with any confidence unless they know

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

The study of exchange rate determination is a relatively new part of international economics,since

It is argued that if a rich high wage country such as the United States were to expand trade with a relatively poor and low wage country such as Mexico,then U.S.industry would migrate south,and U.S.wages would fall to the level of Mexico's.What do you think about this argument?

National Income Accounting and the Balance of Payments

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

Filters