Question 1

In the U.S.balance of payments,purchases of foreign assets by U.S.residents are tabulated as a(n):

Accepted Answer

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

Question 2

Suppose that Spain has a comparative advantage in hats and Portugal has a comparative advantage in doormats.Under a system of free trade,each country specializes and then trades with the other.If the price starts at four hats per doormat,and then increases to five hats per doormat,then:

Accepted Answer

A)  people in Portugal will not want to buy as many hats. 
B)  Spain no longer has a comparative advantage in hats. 
C)  Portugal is flooding the market with too many doormats. 
D)  some of the gains from trade shift to Portugal. 
E)  some of the gains from trade shift to Spain. 
A)  people in Portugal will not want to buy as many hats. 
B)  Spain no longer has a comparative advantage in hats. 
C)  Portugal is flooding the market with too many doormats. 
D)  some of the gains from trade shift to Portugal. 
E)  some of the gains from trade shift to Spain.

Question 3

Comparative advantage indicates that:

Accepted Answer

A)  specialization and exchange will cause trading partners to reduce their joint output. 
B)  a nation can gain from trade even when it is at an absolute disadvantage in producing all goods. 
C)  trade with low-wage countries will pull down the wages of workers in high-wage countries. 
D)  all of the above. 
A)  specialization and exchange will cause trading partners to reduce their joint output. 
B)  a nation can gain from trade even when it is at an absolute disadvantage in producing all goods. 
C)  trade with low-wage countries will pull down the wages of workers in high-wage countries. 
D)  all of the above.

Question 4

If the dollar appreciates:

Accepted Answer

A)  imports to the United States become more expensive for foreigners. 
B)  exports from the United States become more expensive for foreigners. 
C)  imports become more expensive for U.S. citizens. 
D)  exports from the United States become cheaper. 
E)  the dollar will exchange for fewer units of a foreign currency. 
A)  imports to the United States become more expensive for foreigners. 
B)  exports from the United States become more expensive for foreigners. 
C)  imports become more expensive for U.S. citizens. 
D)  exports from the United States become cheaper. 
E)  the dollar will exchange for fewer units of a foreign currency.

Question 5

International specialization and trade according to the principle of comparative advantage is mutually beneficial for all economies involved.

Accepted Answer

A) True 
 B)False

Question 6

Suppose there are two countries,X and Y.If the exchange rate,as measured in X's currency,is currently 9,what do citizens of the nation of Y see when they read their newspapers?

Accepted Answer

A)  The exchange rate for X's currency is 9. 
B)  The exchange rate for X's currency is more than 9. 
C)  The exchange rate for X's currency is 3. 
D)  The exchange rate for X's currency is 0.11. 
E)  Knowing one exchange rate does not mean we can tell the other exchange rate. 
A)  The exchange rate for X's currency is 9. 
B)  The exchange rate for X's currency is more than 9. 
C)  The exchange rate for X's currency is 3. 
D)  The exchange rate for X's currency is 0.11. 
E)  Knowing one exchange rate does not mean we can tell the other exchange rate.

In the U.S.balance of payments,purchases of foreign assets by U.S.residents are tabulated as a(n):

Suppose that Spain has a comparative advantage in hats and Portugal has a comparative advantage in doormats.Under a system of free trade,each country specializes and then trades with the other.If the price starts at four hats per doormat,and then increases to five hats per doormat,then:

Comparative advantage indicates that:

If the dollar appreciates:

International specialization and trade according to the principle of comparative advantage is mutually beneficial for all economies involved.

Suppose there are two countries,X and Y.If the exchange rate,as measured in X's currency,is currently 9,what do citizens of the nation of Y see when they read their newspapers?

Introducing the Economic Way of Thinking

A: Appendix: Applying Graphs to Economics

Production Possibilities,Opportunity Cost,and Economic Growth

Part 1: Market Demand and Supply

Part 2: Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

A: Appendix: The Self-Correcting Aggregate Demand and Supply Model

Fiscal Policy

The Public Sector

Federal Deficits,Surpluses,and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

A: Appendix: Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

Economies in Transition

Growth and the Less-Developed Countries

Filters

Exam 21: International Trade and Finance

In the U.S.balance of payments,purchases of foreign assets by U.S.residents are tabulated as a(n):

Suppose that Spain has a comparative advantage in hats and Portugal has a comparative advantage in doormats.Under a system of free trade,each country specializes and then trades with the other.If the price starts at four hats per doormat,and then increases to five hats per doormat,then:

Comparative advantage indicates that:

If the dollar appreciates:

International specialization and trade according to the principle of comparative advantage is mutually beneficial for all economies involved.

Suppose there are two countries,X and Y.If the exchange rate,as measured in X's currency,is currently 9,what do citizens of the nation of Y see when they read their newspapers?

Introducing the Economic Way of Thinking

A: Appendix: Applying Graphs to Economics

Production Possibilities,Opportunity Cost,and Economic Growth

Part 1: Market Demand and Supply

Part 2: Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

A: Appendix: The Self-Correcting Aggregate Demand and Supply Model

Fiscal Policy

The Public Sector

Federal Deficits,Surpluses,and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

A: Appendix: Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

Economies in Transition

Growth and the Less-Developed Countries

Filters