Question 1

A favourable balance of trade occurs when:

Accepted Answer

A)  exports equal imports. 
B)  the balance of payments balances. 
C)  the current and capital account in the BOP are equal. 
D)  the value of the exports of goods exceeds the value of the imports of goods. 
A)  exports equal imports. 
B)  the balance of payments balances. 
C)  the current and capital account in the BOP are equal. 
D)  the value of the exports of goods exceeds the value of the imports of goods. D

Question 2

A tariff has the effect of granting _____ a larger share of the domestic market.

Accepted Answer

A)  domestic consumers 
B)  foreign consumers 
C)  domestic producers 
D)  foreign producers 
A)  domestic consumers 
B)  foreign consumers 
C)  domestic producers 
D)  foreign producers C

Question 3

If a Japanese stereo priced at 1 000 000 yen can be purchased for A$1000, the exchange rate is:

Accepted Answer

A)  1000 yen per Australian dollar. 
B)  1000 Australian dollars per yen. 
C)  0.001 Australian dollars per yen. 
D)  100 Australian dollars per yen. 
A)  1000 yen per Australian dollar. 
B)  1000 Australian dollars per yen. 
C)  0.001 Australian dollars per yen. 
D)  100 Australian dollars per yen. C

Question 4

A quota is a:

Accepted Answer

A)  tax on a specific quantity of imported goods. 
B)  limited number of foreign firms that can sell imported goods. 
C)  restrictive health and safety standard that raises costs. 
D)  limit on the quantity of a good that can be imported. 
A)  tax on a specific quantity of imported goods. 
B)  limited number of foreign firms that can sell imported goods. 
C)  restrictive health and safety standard that raises costs. 
D)  limit on the quantity of a good that can be imported.

Question 5

Narrbegin Exhibit 18.2 Production possibilities curves for US and Mexico   
-As shown in Exhibit 18.2, the United States has a comparative advantage over Mexico in:

Accepted Answer

A)  wheat but not in cloth. 
B)  cloth but not in wheat. 
C)  both wheat and cloth. 
D)  neither wheat nor cloth 
A)  wheat but not in cloth. 
B)  cloth but not in wheat. 
C)  both wheat and cloth. 
D)  neither wheat nor cloth

Question 6

An increase in inflation in the United States relative to the rate in France would make:

Accepted Answer

A)  US goods relatively less expensive in the United States and in France. 
B)  French goods relatively less expensive in the United States and US goods relatively more expensive in France. 
C)  French goods relatively more expensive in the United States and in France. 
D)  French goods relatively more expensive in the United States and US goods relatively less expensive in France. 
A)  US goods relatively less expensive in the United States and in France. 
B)  French goods relatively less expensive in the United States and US goods relatively more expensive in France. 
C)  French goods relatively more expensive in the United States and in France. 
D)  French goods relatively more expensive in the United States and US goods relatively less expensive in France.

Question 7

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

Question 8

Comparative advantage is:

Accepted Answer

A)  not important in the modern world. 
B)  the same as an absolute advantage. 
C)  the ability of a country to produce a good at a higher opportunity cost than another
Country. 
D)  the ability of a country to produce a good at a lower opportunity cost than another
Country. 
A)  not important in the modern world. 
B)  the same as an absolute advantage. 
C)  the ability of a country to produce a good at a higher opportunity cost than another
Country. 
D)  the ability of a country to produce a good at a lower opportunity cost than another
Country.

Question 9

A country's imports of goods minus its exports of goods are reported in the goods balance.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following would cause the Australian dollar to depreciate against the Japanese yen?

Accepted Answer

A)  Greater popularity of Australian exports in Japan. 
B)  A higher price level in Japan. 
C)  Higher real interest rates in Australia. 
D)  Higher incomes in Australia. 
A)  Greater popularity of Australian exports in Japan. 
B)  A higher price level in Japan. 
C)  Higher real interest rates in Australia. 
D)  Higher incomes in Australia.

Question 11

Free trade allows countries to specialise in producing goods and services they have an absolute advantage in, without restrictions or taxes and subsidies applied to their flow.

Accepted Answer

A) True 
 B)False

Question 12

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 13

The main explanation for why the cheap foreign-labour argument is a poor reason for restricting international trade is that:

Accepted Answer

A)  workers who get paid less tend to have lower productivity than those who get paid more. 
B)  all firms and workers gain when there are no restrictions on international trade. 
C)  infant industries, such as steel and automobiles, need to be protected. 
D)  specialisation and free trade usually raise the prices of all the traded goods, so that the workers can get paid more. 
A)  workers who get paid less tend to have lower productivity than those who get paid more. 
B)  all firms and workers gain when there are no restrictions on international trade. 
C)  infant industries, such as steel and automobiles, need to be protected. 
D)  specialisation and free trade usually raise the prices of all the traded goods, so that the workers can get paid more.

Question 14

Narrbegin Exhibit 18.3 Potatoes and wheat output (tonnes per day)
 $$\begin{array} { | l | c | c | } 
\hline \text { Cuuntry } & \text { Putatoes } & \text { Wheat } \
\hline \text { Australia } & 4 & 2 \
\hline \text { Ireland } & 3 & 1 \
\hline
\end{array}$$ 
-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 15

A depreciation of one's currency means that:

Accepted Answer

A)  the country's exports will become more expensive. 
B)  it now requires less of this currency in exchange for one unit of another currency. 
C)  the country's imports will become less expensive. 
D)  it now requires more of this currency in exchange for one unit of another currency. 
A)  the country's exports will become more expensive. 
B)  it now requires less of this currency in exchange for one unit of another currency. 
C)  the country's imports will become less expensive. 
D)  it now requires more of this currency in exchange for one unit of another currency.

Question 16

Which of the following statements is true with respect to a tariff on imported cheese?

Accepted Answer

A)  It lowers the price of cheese. 
B)  It lowers domestic cheese producers' profits. 
C)  It creates tax revenues for the government. 
D)  It cannot result in retaliation. 
A)  It lowers the price of cheese. 
B)  It lowers domestic cheese producers' profits. 
C)  It creates tax revenues for the government. 
D)  It cannot result in retaliation.

Question 17

In a two-good, two-country world, a country has a comparative advantage in any good for which it has a:

Accepted Answer

A)  lower absolute cost than the other country. 
B)  lower opportunity cost than the other country. 
C)  higher absolute cost than the other country. 
D)  higher opportunity cost than the other country. 
A)  lower absolute cost than the other country. 
B)  lower opportunity cost than the other country. 
C)  higher absolute cost than the other country. 
D)  higher opportunity cost than the other country.

Question 18

If a nation follows a policy of being self-sufficient, its:

Accepted Answer

A)  production possibilities equal its consumption possibilities. 
B)  consumption possibilities are greater than its production possibilities. 
C)  production possibilities curve shifts rightward. 
D)  consumption possibilities are less than its production possibilities. 
A)  production possibilities equal its consumption possibilities. 
B)  consumption possibilities are greater than its production possibilities. 
C)  production possibilities curve shifts rightward. 
D)  consumption possibilities are less than its production possibilities.

Question 19

If the Australian dollar appreciates, the effect of this is likely to be:

Accepted Answer

A)  exports will be more expensive. 
B)  imports will be more expensive. 
C)  import-competing domestic goods will be relatively cheaper. 
D)  'imported inflation' may become a problem. 
A)  exports will be more expensive. 
B)  imports will be more expensive. 
C)  import-competing domestic goods will be relatively cheaper. 
D)  'imported inflation' may become a problem.

Question 20

Narrbegin Exhibit 18.3 Potatoes and wheat output (tonnes per day)
 $$\begin{array} { | l | c | c | } 
\hline \text { Cuuntry } & \text { Putatoes } & \text { Wheat } \
\hline \text { Australia } & 4 & 2 \
\hline \text { Ireland } & 3 & 1 \
\hline
\end{array}$$ 
-In Exhibit 18.3, Australia has an absolute 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.

A favourable balance of trade occurs when:

A tariff has the effect of granting _____ a larger share of the domestic market.

If a Japanese stereo priced at 1 000 000 yen can be purchased for A$1000, the exchange rate is:

A quota is a:

Narrbegin Exhibit 18.2 Production possibilities curves for US and Mexico -As shown in Exhibit 18.2, the United States has a comparative advantage over Mexico in:

An increase in inflation in the United States relative to the rate in France would make:

Narrbegin 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:

Comparative advantage is:

A country's imports of goods minus its exports of goods are reported in the goods balance.

Which of the following would cause the Australian dollar to depreciate against the Japanese yen?

Free trade allows countries to specialise in producing goods and services they have an absolute advantage in, without restrictions or taxes and subsidies applied to their flow.

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

The main explanation for why the cheap foreign-labour argument is a poor reason for restricting international trade is that:

Narrbegin Exhibit 18.3 Potatoes and wheat output (tonnes per day) Cuuntry Putatoes Wheat Australia 4 2 Ireland 3 1 -In Exhibit 18.3, Australia has a comparative advantage in producing:

A depreciation of one's currency means that:

Which of the following statements is true with respect to a tariff on imported cheese?

In a two-good, two-country world, a country has a comparative advantage in any good for which it has a:

If a nation follows a policy of being self-sufficient, its:

If the Australian dollar appreciates, the effect of this is likely to be:

Narrbegin Exhibit 18.3 Potatoes and wheat output (tonnes per day) Cuuntry Putatoes Wheat Australia 4 2 Ireland 3 1 -In Exhibit 18.3, Australia has an absolute advantage in producing:

Thinking Like an Economist

Applying Graphs to Economics

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: Housing Affordability 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

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Exam 19: International Trade and Finance

A favourable balance of trade occurs when:

A tariff has the effect of granting _____ a larger share of the domestic market.

If a Japanese stereo priced at 1 000 000 yen can be purchased for A$1000, the exchange rate is:

A quota is a:

Narrbegin Exhibit 18.2 Production possibilities curves for US and Mexico -As shown in Exhibit 18.2, the United States has a comparative advantage over Mexico in:

An increase in inflation in the United States relative to the rate in France would make:

Narrbegin 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:

Comparative advantage is:

A country's imports of goods minus its exports of goods are reported in the goods balance.

Which of the following would cause the Australian dollar to depreciate against the Japanese yen?

Free trade allows countries to specialise in producing goods and services they have an absolute advantage in, without restrictions or taxes and subsidies applied to their flow.

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

The main explanation for why the cheap foreign-labour argument is a poor reason for restricting international trade is that:

Narrbegin Exhibit 18.3 Potatoes and wheat output (tonnes per day) Cuuntry Putatoes Wheat Australia 4 2 Ireland 3 1 -In Exhibit 18.3, Australia has a comparative advantage in producing:

A depreciation of one's currency means that:

Which of the following statements is true with respect to a tariff on imported cheese?

In a two-good, two-country world, a country has a comparative advantage in any good for which it has a:

If a nation follows a policy of being self-sufficient, its:

If the Australian dollar appreciates, the effect of this is likely to be:

Narrbegin Exhibit 18.3 Potatoes and wheat output (tonnes per day) Cuuntry Putatoes Wheat Australia 4 2 Ireland 3 1 -In Exhibit 18.3, Australia has an absolute advantage in producing:

Thinking Like an Economist

Applying Graphs to Economics

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: Housing Affordability 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

Filters