Question 1

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 are 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 are actually relevant to modern international economy. 
E)  not well understood by modern mathematically oriented theorists. C

Question 2

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. D

Question 3

Historians of economic thought often describe ________ written by ________ and published in ________ as the first real exposition of an economic model.

Accepted Answer

A)  "Of the Balance of Trade," David Hume, 1776 
B)  "Wealth of Nations," David Hume, 1758 
C)  "Wealth of Nations," Adam Smith, 1758 
D)  "Wealth of Nations," Adam Smith, 1776 
E)  "Of the Balance of Trade," David Hume, 1758 
A)  "Of the Balance of Trade," David Hume, 1776 
B)  "Wealth of Nations," David Hume, 1758 
C)  "Wealth of Nations," Adam Smith, 1758 
D)  "Wealth of Nations," Adam Smith, 1776 
E)  "Of the Balance of Trade," David Hume, 1758 E

Question 4

It is argued that global trade tends to be more important to countries with smaller economies than the U.S. Is this empirically verified?

Accepted Answer

Yes. Figure 1-2 shows exports and import

Question 5

The international capital market is

Accepted Answer

A)  the place where you can rent earth moving equipment anywhere in the world. 
B)  a set of arrangements by which individuals and firms exchange money now for promises to pay in the future. 
C)  the arrangement where banks build up their capital by borrowing from the Central Bank. 
D)  the place where emerging economies accept capital invested by banks. 
E)  exclusively concerned with the debt crisis that ended in the 1990s. 
A)  the place where you can rent earth moving equipment anywhere in the world. 
B)  a set of arrangements by which individuals and firms exchange money now for promises to pay in the future. 
C)  the arrangement where banks build up their capital by borrowing from the Central Bank. 
D)  the place where emerging economies accept capital invested by banks. 
E)  exclusively concerned with the debt crisis that ended in the 1990s.

Question 6

How are the patterns of international trade, that is the pattern of what different countries export and import, explained?

Accepted Answer

Climate explains why Brazil exports coff

Question 7

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 8

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 9

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 10

From 1950 to 2015

Accepted Answer

A)  the U.S. economy roughly tripled in size. 
B)  U.S. imports roughly tripled in size. 
C)  the share of U.S. trade in the global economy roughly tripled in size. 
D)  U.S. imports roughly tripled as compared to U.S. exports. 
E)  U.S. exports roughly tripled in size. 
A)  the U.S. economy roughly tripled in size. 
B)  U.S. imports roughly tripled in size. 
C)  the share of U.S. trade in the global economy roughly tripled in size. 
D)  U.S. imports roughly tripled as compared to U.S. exports. 
E)  U.S. exports roughly tripled in size.

Question 11

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 12

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) .

Question 13

After World War II, the United States has pursued a broad policy of

Accepted Answer

A)  strengthening "Fortress America" protectionism. 
B)  removing barriers to international trade. 
C)  isolating Iran and other members of the "axis of evil." 
D)  protecting the U.S. from the economic impact of oil producers. 
E)  restricting trade of manufactured goods. 
A)  strengthening "Fortress America" protectionism. 
B)  removing barriers to international trade. 
C)  isolating Iran and other members of the "axis of evil." 
D)  protecting the U.S. from the economic impact of oil producers. 
E)  restricting trade of manufactured goods.

Question 14

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 15

"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 16

International economics ________ use the same fundamental methods of analysis as other branches of economics, because ________.

Accepted Answer

A)  does not, the level of complexity of international issues is unique 
B)  does not, the interactions associated with international economic relations is highly mathematical 
C)  does not, international economics takes a different perspective on economic issues 
D)  does not, international economic policy requires cooperation with other countries 
E)  does, the motives and behavior of individuals are the same in international trade as they are in domestic transactions 
A)  does not, the level of complexity of international issues is unique 
B)  does not, the interactions associated with international economic relations is highly mathematical 
C)  does not, international economics takes a different perspective on economic issues 
D)  does not, international economic policy requires cooperation with other countries 
E)  does, the motives and behavior of individuals are the same in international trade as they are in domestic transactions

Question 17

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 18

Cost-benefit analysis of international trade

Accepted Answer

A)  is basically useless. 
B)  is empirically intractable. 
C)  focuses attention primarily on conflicts of interest within countries. 
D)  focuses attention on conflicts of interest between countries. 
E)  never leads to government intervention in international trade. 
A)  is basically useless. 
B)  is empirically intractable. 
C)  focuses attention primarily on conflicts of interest within countries. 
D)  focuses attention on conflicts of interest between countries. 
E)  never leads to government intervention in international trade.

Question 19

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 20

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.

Exam 1: Introduction

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

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

Historians of economic thought often describe ________ written by ________ and published in ________ as the first real exposition of an economic model.

It is argued that global trade tends to be more important to countries with smaller economies than the U.S. Is this empirically verified?

The international capital market is

How are the patterns of international trade, that is the pattern of what different countries export and import, explained?

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

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

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

From 1950 to 2015

Trade theorists have proven that the gains from international trade

For almost 70 years international trade policies have been governed

After World War II, the United States has pursued a broad policy of

The international financial crisis of 2007 was the result of

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

International economics ________ use the same fundamental methods of analysis as other branches of economics, because ________.

Because the Constitution forbids restraints on interstate trade

Cost-benefit analysis of international trade

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

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

World Trade: an Overview

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

National Income Accounting and the Balance of Payments

Exchange Rates and the Foreign Exchange Market: an Asset Approach

Money, Interest Rates, and Exchange Rates

Price Levels and the Exchange Rate in the Long Run

Output and the Exchange Rate in the Short Run

Fixed Exchange Rates and Foreign Exchange Intervention

International Monetary Systems: an Historical Overview

Financial Globalization: Opportunity and Crisis

Optimum Currency Areas and the Euro

Developing Countries: Growth, Crisis, and Reform

Filters

Historians of economic thought often describe written by and published in as the first real exposition of an economic model.

International economics use the same fundamental methods of analysis as other branches of economics, because .