Question 1

Which of the following would increase prices for U.S.consumers?

Accepted Answer

A) a tariff on imported automobiles 
B) an automobile import quota 
C) a foreign government subsidizing auto production 
D) all of the above 
E) A and B above only 
A) a tariff on imported automobiles 
B) an automobile import quota 
C) a foreign government subsidizing auto production 
D) all of the above 
E) A and B above only

Question 2

Which of the following is true of price changes in currencies under the fixed-rate system?

Accepted Answer

A) Frequent occurrence 
B) Low magnitude 
C) Infrequent, but high magnitude 
D) Frequent, but low magnitude 
A) Frequent occurrence 
B) Low magnitude 
C) Infrequent, but high magnitude 
D) Frequent, but low magnitude

Question 3

A new U.S.import quota on imported steel would be likely to:

Accepted Answer

A) reduce the cost of production to steel-using American firms. 
B) generate tax revenue to the government. 
C) increase U.S. production of steel. 
D) increase the production of steel-using American firms. 
A) reduce the cost of production to steel-using American firms. 
B) generate tax revenue to the government. 
C) increase U.S. production of steel. 
D) increase the production of steel-using American firms.

Question 4

Figure 18-C  
-Refer to Figure 18-C.After the tariff domestic producers gain area:

Accepted Answer

A) C + G 
B) C + A 
C) B 
D) A 
A) C + G 
B) C + A 
C) B 
D) A

Question 5

The inevitable cost of protecting domestic industries from foreign competition will be higher prices for domestic consumers.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is correct?

Accepted Answer

A) U.S. International trade represents about 50 percent of U.S. GDP. 
B) Less than 5 percent of world output is sold in a country different from the one in which it is produced. 
C) Without tariff protection the number of jobs available to domestic workers would decline. 
D) The volume of international trade has grown rapidly. 
A) U.S. International trade represents about 50 percent of U.S. GDP. 
B) Less than 5 percent of world output is sold in a country different from the one in which it is produced. 
C) Without tariff protection the number of jobs available to domestic workers would decline. 
D) The volume of international trade has grown rapidly.

Question 7

Exhibit 18-A  
-Refer to Exhibit 18-A.For Nation Z, the current account balance for the year 2006 equals:

Accepted Answer

A) -$97 billion. 
B) -$96 billion. 
C) $96 billion. 
D) -$87 billion. 
E) $87 billion. 
A) -$97 billion. 
B) -$96 billion. 
C) $96 billion. 
D) -$87 billion. 
E) $87 billion.

Question 8

If the United States exports military hardware, what is the effect in the exchange market?

Accepted Answer

A) It will increase the supply of U.S. dollars. 
B) It will decrease the supply of U.S. dollars. 
C) It will increase the demand for U.S. dollars. 
D) It will decrease the demand for U.S. dollars. 
A) It will increase the supply of U.S. dollars. 
B) It will decrease the supply of U.S. dollars. 
C) It will increase the demand for U.S. dollars. 
D) It will decrease the demand for U.S. dollars.

Question 9

If the United States could produce 4 tons of potatoes or 2 tons of wheat per worker per year, while Ireland could produce 3 tons of potatoes or 2 tons of wheat per worker per year, the country with the comparative advantage in producing potatoes is ____ and the country with the absolute advantage in producing potatoes is ____.

Accepted Answer

A) the United States; the United States 
B) the United States; Ireland 
C) Ireland; the United States 
D) Ireland; Ireland 
A) the United States; the United States 
B) the United States; Ireland 
C) Ireland; the United States 
D) Ireland; Ireland

Question 10

Figure 18-B  
-Refer to Figure 18-B.The change in consumer surplus from free trade is area:

Accepted Answer

A) A + B + C + D 
B) B + C + D 
C) A + B + E 
D) A 
A) A + B + C + D 
B) B + C + D 
C) A + B + E 
D) A

Question 11

Columbia produces coffee with less labor and land than any other country; it therefore necessarily has

Accepted Answer

A) an absolute advantage in coffee production. 
B) a comparative advantage in coffee production. 
C) both a comparative and absolute advantage in coffee production. 
D) an absolute advantage and comparative disadvantage in coffee production. 
A) an absolute advantage in coffee production. 
B) a comparative advantage in coffee production. 
C) both a comparative and absolute advantage in coffee production. 
D) an absolute advantage and comparative disadvantage in coffee production.

Question 12

A new U.S.tariff on imported steel would be likely to:

Accepted Answer

A) raise the cost of production to steel-using American firms. 
B) generate tax revenue to the government. 
C) increase U.S. production of steel. 
D) decrease the production of steel-using American firms. 
E) do all of the above. 
A) raise the cost of production to steel-using American firms. 
B) generate tax revenue to the government. 
C) increase U.S. production of steel. 
D) decrease the production of steel-using American firms. 
E) do all of the above.

Question 13

A change in the Euro-dollar exchange rate from $1 per Euro to $2 per Euro would ____ the U.S.price of German goods, ____ the number of German goods that would be demanded in the U.S.

Accepted Answer

A) decrease; reducing. 
B) decrease; increasing. 
C) increase; reducing. 
D) increase; increasing. 
A) decrease; reducing. 
B) decrease; increasing. 
C) increase; reducing. 
D) increase; increasing.

Question 14

A decrease in U.S.interest rates will, other things equal, tend to:

Accepted Answer

A) lower the foreign exchange value of the dollar. 
B) help U.S. exporters. 
C) cause a net outflow of capital from the U.S. 
D) do all of the above. 
A) lower the foreign exchange value of the dollar. 
B) help U.S. exporters. 
C) cause a net outflow of capital from the U.S. 
D) do all of the above.

Question 15

What are the effects of a tariff, and who benefits and who loses when tariffs are imposed? What are the effects of a quota, and who benefits and who loses when quotas are imposed?

Accepted Answer

A tariff raises the domestic price of th

Question 16

Which of the following would be expected if the tariff on foreign-produced automobiles was increased?

Accepted Answer

A) The domestic price of automobiles would fall. 
B) The supply of foreign automobiles to the domestic market would be reduced, causing auto prices to rise. 
C) The number of unemployed workers in the domestic automobile industry would rise. 
D) The demand for foreign-produced automobiles would increase, causing the price of automobiles to increase in other nations. 
A) The domestic price of automobiles would fall. 
B) The supply of foreign automobiles to the domestic market would be reduced, causing auto prices to rise. 
C) The number of unemployed workers in the domestic automobile industry would rise. 
D) The demand for foreign-produced automobiles would increase, causing the price of automobiles to increase in other nations.

Question 17

Tariffs result in a decrease in consumer surplus because:

Accepted Answer

A) the price and the quantity consumed of the protected good increases. 
B) the price and the quantity consumed of the protected good decreases. 
C) the price of the protected good increases and quantity consumed decreases. 
D) the price of the protected good decreases and quantity consumed increases. 
A) the price and the quantity consumed of the protected good increases. 
B) the price and the quantity consumed of the protected good decreases. 
C) the price of the protected good increases and quantity consumed decreases. 
D) the price of the protected good decreases and quantity consumed increases.

Question 18

The agreement that established a system of fixed exchange rates immediately following World War II is known as the:

Accepted Answer

A) IMF agreement. 
B) World Bank agreement. 
C) Bretton Woods agreement. 
D) none of the above. 
A) IMF agreement. 
B) World Bank agreement. 
C) Bretton Woods agreement. 
D) none of the above.

Question 19

Figure 18-C  
-Refer to Figure 18-C.A tariff

Accepted Answer

A) makes domestic consumers better off 
B) makes domestic producers better off 
C) makes both domestic producers and consumers better off 
D) makes everyone worse off 
A) makes domestic consumers better off 
B) makes domestic producers better off 
C) makes both domestic producers and consumers better off 
D) makes everyone worse off

Question 20

An increase in the demand for British pounds might result from:

Accepted Answer

A) a reduction in the price level in the U.S. relative to Britain. 
B) a recession in the U.S. which reduces real output. 
C) a decline in interest rates in Britain. 
D) a decline in interest rates in the U.S. 
A) a reduction in the price level in the U.S. relative to Britain. 
B) a recession in the U.S. which reduces real output. 
C) a decline in interest rates in Britain. 
D) a decline in interest rates in the U.S.

Which of the following would increase prices for U.S.consumers?

Which of the following is true of price changes in currencies under the fixed-rate system?

A new U.S.import quota on imported steel would be likely to:

Figure 18-C -Refer to Figure 18-C.After the tariff domestic producers gain area:

The inevitable cost of protecting domestic industries from foreign competition will be higher prices for domestic consumers.

Which of the following is correct?

Exhibit 18-A -Refer to Exhibit 18-A.For Nation Z, the current account balance for the year 2006 equals:

If the United States exports military hardware, what is the effect in the exchange market?

Figure 18-B -Refer to Figure 18-B.The change in consumer surplus from free trade is area:

Columbia produces coffee with less labor and land than any other country; it therefore necessarily has

A new U.S.tariff on imported steel would be likely to:

A change in the Euro-dollar exchange rate from $1 per Euro to $2 per Euro would the U.S.price of German goods, the number of German goods that would be demanded in the U.S.

A decrease in U.S.interest rates will, other things equal, tend to:

What are the effects of a tariff, and who benefits and who loses when tariffs are imposed? What are the effects of a quota, and who benefits and who loses when quotas are imposed?

Which of the following would be expected if the tariff on foreign-produced automobiles was increased?

Tariffs result in a decrease in consumer surplus because:

The agreement that established a system of fixed exchange rates immediately following World War II is known as the:

Figure 18-C -Refer to Figure 18-C.A tariff

An increase in the demand for British pounds might result from:

The Role and Method of Economics

The Economic Way of Thinking

Supply and Demand

Using Supply and Demand

Market Failure and Public Choice

Production and Costs

Firms in Competitive Markets

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Economic Growth

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

Filters

Exam 18: International Economics

Which of the following would increase prices for U.S.consumers?

Which of the following is true of price changes in currencies under the fixed-rate system?

A new U.S.import quota on imported steel would be likely to:

Figure 18-C -Refer to Figure 18-C.After the tariff domestic producers gain area:

The inevitable cost of protecting domestic industries from foreign competition will be higher prices for domestic consumers.

Which of the following is correct?

Exhibit 18-A -Refer to Exhibit 18-A.For Nation Z, the current account balance for the year 2006 equals:

If the United States exports military hardware, what is the effect in the exchange market?

Figure 18-B -Refer to Figure 18-B.The change in consumer surplus from free trade is area:

Columbia produces coffee with less labor and land than any other country; it therefore necessarily has

A new U.S.tariff on imported steel would be likely to:

A change in the Euro-dollar exchange rate from $1 per Euro to $2 per Euro would ____ the U.S.price of German goods, ____ the number of German goods that would be demanded in the U.S.

A decrease in U.S.interest rates will, other things equal, tend to:

What are the effects of a tariff, and who benefits and who loses when tariffs are imposed? What are the effects of a quota, and who benefits and who loses when quotas are imposed?

Which of the following would be expected if the tariff on foreign-produced automobiles was increased?

Tariffs result in a decrease in consumer surplus because:

The agreement that established a system of fixed exchange rates immediately following World War II is known as the:

Figure 18-C -Refer to Figure 18-C.A tariff

An increase in the demand for British pounds might result from:

The Role and Method of Economics

The Economic Way of Thinking

Supply and Demand

Using Supply and Demand

Market Failure and Public Choice

Production and Costs

Firms in Competitive Markets

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Economic Growth

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

Filters

A change in the Euro-dollar exchange rate from $1 per Euro to $2 per Euro would the U.S.price of German goods, the number of German goods that would be demanded in the U.S.