Question 1

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 2

For the 70 years preceding 1994, 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 3

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 4

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

Question 5

The international debt crisis of early 1982 was precipitated when ________ could not pay its international debts.

Accepted Answer

A)  Russia 
B)  Mexico 
C)  Brazil 
D)  Malaysia 
E)  China 
A)  Russia 
B)  Mexico 
C)  Brazil 
D)  Malaysia 
E)  China

Question 6

The distinction between international trade and international money is not entirely clear because

Accepted Answer

A)  real developments in the trade accounts do not have monetary implications. 
B)  the balance of payments includes only real measures. 
C)  developments caused by purely monetary changes have no real effects. 
D)  trade models focus on real, or barter relationships. 
E)  most international trade involves monetary transactions. 
A)  real developments in the trade accounts do not have monetary implications. 
B)  the balance of payments includes only real measures. 
C)  developments caused by purely monetary changes have no real effects. 
D)  trade models focus on real, or barter relationships. 
E)  most international trade involves monetary transactions.

Question 7

From 1960 to 2009,

Accepted Answer

A)  the U.S. economy roughly tripled in size. 
B)  U.S. imports roughly tripled in size. 
C)  the share of US Trade in the 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 US Trade in the 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 8

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 9

An improvement in a country's balance of payments means a decrease in its balance of payments deficit, or an increase in its surplus. In fact we know that a surplus in a balance of payments

Accepted Answer

A)  is always beneficial. 
B)  is usually beneficial. 
C)  is never harmful. 
D)  is sometimes harmful. 
E)  is always harmful. 
A)  is always beneficial. 
B)  is usually beneficial. 
C)  is never harmful. 
D)  is sometimes harmful. 
E)  is always harmful.

Question 10

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 11

Which of the following is not a major concern of international economic theory?

Accepted Answer

A)  protectionism 
B)  the balance of payments 
C)  exchange rate determination 
D)  bilateral trade relations with China 
E)  the international capital market 
A)  protectionism 
B)  the balance of payments 
C)  exchange rate determination 
D)  bilateral trade relations with China 
E)  the international capital market

Question 12

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 13

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 14

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 15

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 16

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 17

In 1999, demonstrators representing a mix of traditional and new ideologies disrupted a major international trade meeting in Seattle of

Accepted Answer

A)  the OECD. 
B)  NAFTA. 
C)  the WTO. 
D)  GATT. 
E)  the G8. 
A)  the OECD. 
B)  NAFTA. 
C)  the WTO. 
D)  GATT. 
E)  the G8.

Question 18

"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 19

International trade theory implies that international trade is beneficial to all trading countries. However, casual observation leads to the conclusion that official obstruction of international trade flows is widespread. How might you reconcile these two facts?

Accepted Answer

This question is meant to allo

Exam 1: Introduction

Because the Constitution forbids restraints on interstate trade,

For the 70 years preceding 1994, international trade policies have been governed

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

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?

The international debt crisis of early 1982 was precipitated when ________ could not pay its international debts.

The distinction between international trade and international money is not entirely clear because

From 1960 to 2009,

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

An improvement in a country's balance of payments means a decrease in its balance of payments deficit, or an increase in its surplus. In fact we know that a surplus in a balance of payments

The international capital market is

Which of the following is not a major concern of international economic theory?

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

Since 1994, trade rules have been enforced by

Trade theorists have proven that the gains from international trade

Which of the following does not belong?

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

In 1999, demonstrators representing a mix of traditional and new ideologies disrupted a major international trade meeting in Seattle of

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

International trade theory implies that international trade is beneficial to all trading countries. However, casual observation leads to the conclusion that official obstruction of international trade flows is widespread. How might you reconcile these two facts?

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

Optimum Currency Areas and the European Experience

Financial Globalization: Opportunity and Crisis

Developing Countries: Growth, Crisis, and Reform

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