Question 1

Exhibit 18-4 Dollars per British pound
  
-In Exhibit 18-4,when the exchange rate is 5 dollars per pound:

Accepted Answer

A) there is an excess supply of 400 pounds. 
B) there is an excess demand of 400 pounds. 
C) there is an excess supply of 400 dollars. 
D) there is an excess demand of 400 dollars. 
E) the market is in equilibrium. 
A) there is an excess supply of 400 pounds. 
B) there is an excess demand of 400 pounds. 
C) there is an excess supply of 400 dollars. 
D) there is an excess demand of 400 dollars. 
E) the market is in equilibrium.

Question 2

Exhibit 18-3 Potatoes and wheat output (tonnes per day)
  
-In Exhibit 18-3,Australia has a comparative advantage in producing:

Accepted Answer

A) potatoes. 
B) wheat. 
C) both potatoes and wheat. 
D) neither potatoes nor wheat. 
A) potatoes. 
B) wheat. 
C) both potatoes and wheat. 
D) neither potatoes nor wheat.

Question 3

Free trade is:

Accepted Answer

A) the flow of goods and services between countries with taxes applied to the flow. 
B) the flow of goods and services between countries with subsidies applied to the flow. 
C) the flow of goods and services between countries with restrictions applied to the flow. 
D) the flow of goods and services between countries without restrictions applied to the flow. 
A) the flow of goods and services between countries with taxes applied to the flow. 
B) the flow of goods and services between countries with subsidies applied to the flow. 
C) the flow of goods and services between countries with restrictions applied to the flow. 
D) the flow of goods and services between countries without restrictions applied to the flow.

Question 4

If the exchange rate of yen for dollars increases from 100 yen = $1 to 110 yen = $1,then:

Accepted Answer

A) Japanese-produced goods would become more expensive. 
B) the dollar has depreciated. 
C) the yen has appreciated. 
D) Australian-produced goods would become more expensive. 
E) Australian exports would increase. 
A) Japanese-produced goods would become more expensive. 
B) the dollar has depreciated. 
C) the yen has appreciated. 
D) Australian-produced goods would become more expensive. 
E) Australian exports would increase.

Question 5

A higher value of country A currency:

Accepted Answer

A) increases the competitiveness of the country A producers. 
B) increases the demand for the country A goods and services overseas. 
C) reduces dependency of country A on other countries. 
D) reduces an international competitiveness of the country A producers. 
A) increases the competitiveness of the country A producers. 
B) increases the demand for the country A goods and services overseas. 
C) reduces dependency of country A on other countries. 
D) reduces an international competitiveness of the country A producers.

Question 6

Exhibit 18-1 Production possibilities curves
  
-In Exhibit 18-1,the production possibilities curves of wheat and corn for Nabia and Pada are presented.In Nabia the cost of producing one more unit of wheat is equal to:

Accepted Answer

A) 4 units of wheat. 
B) 1/4 unit of corn. 
C) 4 units of corn. 
D) 15 units of corn. 
E) 60 units of corn. 
A) 4 units of wheat. 
B) 1/4 unit of corn. 
C) 4 units of corn. 
D) 15 units of corn. 
E) 60 units of corn.

Question 7

A flexible exchange rate system is one in which countries:

Accepted Answer

A) allow their currencies to adjust continuously according to the demand and supply. 
B) do not allow their currencies to adjust continuously according to the demand and supply. 
C) allow their currencies to adjust according to the foreign policy. 
D) allow their currencies to adjust by fixing an exchange rate regular. 
A) allow their currencies to adjust continuously according to the demand and supply. 
B) do not allow their currencies to adjust continuously according to the demand and supply. 
C) allow their currencies to adjust according to the foreign policy. 
D) allow their currencies to adjust by fixing an exchange rate regular.

Question 8

Exhibit 18-4 Dollars per British pound
  
-In Exhibit 18-4,when the exchange rate is 1 dollar per pound:

Accepted Answer

A) the market is in equilibrium. 
B) there is a surplus of 30 pounds. 
C) there is a surplus of 60 pounds. 
D) there is a shortage of 30 pounds. 
E) there is a shortage of 60 pounds. 
A) the market is in equilibrium. 
B) there is a surplus of 30 pounds. 
C) there is a surplus of 60 pounds. 
D) there is a shortage of 30 pounds. 
E) there is a shortage of 60 pounds.

Question 9

Assume A$1.05 is exchangeable for one US dollar.The exchange rate is:

Accepted Answer

A) US$1=A$0.95. 
B) A$1=US$1.05. 
C) A$1=US$0.95. 
D) US$1=A$1.05. 
E) both A$1=US$0.95 and US$1=A$1.05. 
A) US$1=A$0.95. 
B) A$1=US$1.05. 
C) A$1=US$0.95. 
D) US$1=A$1.05. 
E) both A$1=US$0.95 and US$1=A$1.05.

Question 10

In terms of production possibilities curves,the benefits of trade between two nations is that each nation moves to:

Accepted Answer

A) a lower standard of living. 
B) a more expansive consumption possibilities combination. 
C) a higher standard of living. 
D) a lower consumption possibilities combination. 
A) a lower standard of living. 
B) a more expansive consumption possibilities combination. 
C) a higher standard of living. 
D) a lower consumption possibilities combination.

Question 11

'More productive workers receive higher wages than less productive workers.' This observation is a major flaw in which of the following arguments for protectionism?

Accepted Answer

A) The infant industry argument. 
B) The national security argument. 
C) The employment argument. 
D) The cheap foreign labour argument. 
A) The infant industry argument. 
B) The national security argument. 
C) The employment argument. 
D) The cheap foreign labour argument.

Question 12

If a country's production possibilities equal its consumption possibilities,then we can say that:

Accepted Answer

A) net exports equal zero. 
B) the country is self-sufficient. 
C) its exports must equal its imports. 
D) the country has an absolute advantage in everything. 
A) net exports equal zero. 
B) the country is self-sufficient. 
C) its exports must equal its imports. 
D) the country has an absolute advantage in everything.

Question 13

Australia largely exports _____ and imports _____.

Accepted Answer

A) manufactured goods; primary commodities 
B) services; manufactured goods 
C) manufactured goods; services 
D) primary commodities; manufactured goods 
E) wool; computers 
F)computers; coal 
A) manufactured goods; primary commodities 
B) services; manufactured goods 
C) manufactured goods; services 
D) primary commodities; manufactured goods 
E) wool; computers 
F)computers; coal

Question 14

A limit on the quantity of a good that may be imported in a given time period is called:

Accepted Answer

A) an embargo. 
B) a tariff. 
C) a quota. 
D) dumping. 
A) an embargo. 
B) a tariff. 
C) a quota. 
D) dumping.

Question 15

Free trade can be strongly opposed because:

Accepted Answer

A) free trade provides consumers with lower prices and larger quantities of products. 
B) reduced tariffs result in extra buying power of consumers. 
C) free trade can stimulate other areas of domestic production. 
D) cheaper imports can reduce incomes of the owners of the domestic firms competing with the cheaper imports. 
A) free trade provides consumers with lower prices and larger quantities of products. 
B) reduced tariffs result in extra buying power of consumers. 
C) free trade can stimulate other areas of domestic production. 
D) cheaper imports can reduce incomes of the owners of the domestic firms competing with the cheaper imports.

Question 16

The national security argument for tariff protection is based on the need to:

Accepted Answer

A) trade only with other friendly countries and impose tariffs on the rest. 
B) protect employment in key industries. 
C) protect defence-related industries in case of war. 
D) raise money to field a sufficiently large army. 
A) trade only with other friendly countries and impose tariffs on the rest. 
B) protect employment in key industries. 
C) protect defence-related industries in case of war. 
D) raise money to field a sufficiently large army.

Question 17

Trade restrictions imposed in the name of national security have been recommended by protectionists in order to:

Accepted Answer

A) develop strong international connections with other industries. 
B) avoid competition with overseas producers. 
C) have cheaper domestic labour. 
D) not be dependent on foreign countries for defence-related goods in wartime. 
A) develop strong international connections with other industries. 
B) avoid competition with overseas producers. 
C) have cheaper domestic labour. 
D) not be dependent on foreign countries for defence-related goods in wartime.

Question 18

An increase in the real interest rate in Australia relative to the US will most likely cause:

Accepted Answer

A) the supply of $A to shift to the right. 
B) a depreciation of the $A. 
C) the demand for $A to shift to the right. 
D) the demand for $A to shift to the left. 
E) an appreciation of the $US. 
A) the supply of $A to shift to the right. 
B) a depreciation of the $A. 
C) the demand for $A to shift to the right. 
D) the demand for $A to shift to the left. 
E) an appreciation of the $US.

Question 19

If a small country is protecting its industry that might mean that:

Accepted Answer

A) tariffs are necessary because otherwise wages in the small country will be very low. 
B) tariffs are necessary to protect employment in the small country. 
C) workers in other countries are more productive than workers in the small country. 
D) it is too small to be able to achieve economies of scale in this industry. 
A) tariffs are necessary because otherwise wages in the small country will be very low. 
B) tariffs are necessary to protect employment in the small country. 
C) workers in other countries are more productive than workers in the small country. 
D) it is too small to be able to achieve economies of scale in this industry.

Question 20

Purchases of foreign assets by Australian residents are tabulated in the Australian balance of payments as a:

Accepted Answer

A) capital inflow. 
B) capital outflow. 
C) current account outflow. 
D) unilateral transfer. 
A) capital inflow. 
B) capital outflow. 
C) current account outflow. 
D) unilateral transfer.

Exhibit 18-4 Dollars per British pound -In Exhibit 18-4,when the exchange rate is 5 dollars per pound:

Exhibit 18-3 Potatoes and wheat output (tonnes per day) -In Exhibit 18-3,Australia has a comparative advantage in producing:

Free trade is:

If the exchange rate of yen for dollars increases from 100 yen = $1 to 110 yen = $1,then:

A higher value of country A currency:

Exhibit 18-1 Production possibilities curves -In Exhibit 18-1,the production possibilities curves of wheat and corn for Nabia and Pada are presented.In Nabia the cost of producing one more unit of wheat is equal to:

A flexible exchange rate system is one in which countries:

Exhibit 18-4 Dollars per British pound -In Exhibit 18-4,when the exchange rate is 1 dollar per pound:

Assume A$1.05 is exchangeable for one US dollar.The exchange rate is:

In terms of production possibilities curves,the benefits of trade between two nations is that each nation moves to:

'More productive workers receive higher wages than less productive workers.' This observation is a major flaw in which of the following arguments for protectionism?

If a country's production possibilities equal its consumption possibilities,then we can say that:

Australia largely exports _ and imports _.

A limit on the quantity of a good that may be imported in a given time period is called:

Free trade can be strongly opposed because:

The national security argument for tariff protection is based on the need to:

Trade restrictions imposed in the name of national security have been recommended by protectionists in order to:

An increase in the real interest rate in Australia relative to the US will most likely cause:

If a small country is protecting its industry that might mean that:

Purchases of foreign assets by Australian residents are tabulated in the Australian balance of payments as a:

Thinking like an economist

Production possibilities and opportunity cost

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Business cycles and economic growth

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

Applying graphs to economics

Filters

Exam 18: International trade and finance

Exhibit 18-4 Dollars per British pound -In Exhibit 18-4,when the exchange rate is 5 dollars per pound:

Exhibit 18-3 Potatoes and wheat output (tonnes per day) -In Exhibit 18-3,Australia has a comparative advantage in producing:

Free trade is:

If the exchange rate of yen for dollars increases from 100 yen = $1 to 110 yen = $1,then:

A higher value of country A currency:

Exhibit 18-1 Production possibilities curves -In Exhibit 18-1,the production possibilities curves of wheat and corn for Nabia and Pada are presented.In Nabia the cost of producing one more unit of wheat is equal to:

A flexible exchange rate system is one in which countries:

Exhibit 18-4 Dollars per British pound -In Exhibit 18-4,when the exchange rate is 1 dollar per pound:

Assume A$1.05 is exchangeable for one US dollar.The exchange rate is:

In terms of production possibilities curves,the benefits of trade between two nations is that each nation moves to:

'More productive workers receive higher wages than less productive workers.' This observation is a major flaw in which of the following arguments for protectionism?

If a country's production possibilities equal its consumption possibilities,then we can say that:

Australia largely exports _____ and imports _____.

A limit on the quantity of a good that may be imported in a given time period is called:

Free trade can be strongly opposed because:

The national security argument for tariff protection is based on the need to:

Trade restrictions imposed in the name of national security have been recommended by protectionists in order to:

An increase in the real interest rate in Australia relative to the US will most likely cause:

If a small country is protecting its industry that might mean that:

Purchases of foreign assets by Australian residents are tabulated in the Australian balance of payments as a:

Thinking like an economist

Production possibilities and opportunity cost

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Business cycles and economic growth

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

Applying graphs to economics

Filters

Australia largely exports _ and imports _.