Question 1

The Bretton Woods Conference:

Accepted Answer

A) established a system of fixed exchange rates. 
B) established a system of flexible exchange rates. 
C) established a dirty float exchange rate system. 
D) did none of the above. 
A) established a system of fixed exchange rates. 
B) established a system of flexible exchange rates. 
C) established a dirty float exchange rate system. 
D) did none of the above.

Question 2

If two countries produce both wheat and sugar and one country has the comparative advantage in producing wheat than the other country must have the absolute advantage producing sugar.

Accepted Answer

A) True 
 B)False

Question 3

The difference between the price the seller receives for a good or service and the minimum price he would be willing to accept for that unit is called:

Accepted Answer

A) the total gains from trading that unit. 
B) the gain in producer surplus. 
C) the gain in consumer surplus. 
D) the total surplus. 
A) the total gains from trading that unit. 
B) the gain in producer surplus. 
C) the gain in consumer surplus. 
D) the total surplus.

Question 4

Classify each of the following as debits or credits in the U.S.balance of payments. A. Americans buy choculate fom the Swis5.
B. U.S. gives foreipg aid to Bosmia.
C. British investors purchase U.S. government bonds.
D. American tourists travel to Australia.
E. Volkswagen earns profits in the United States from its new cars.
F. Tuyota builds a newplant in Ohio.
G. Capital Records 5 ells rock and roll music in Sweden.
H. German consumer buy Ronca Vegematics made in United States.
I. Practer a Gamble eams profits in their Mexican facility.
J. RuF5ian tourifts travel to Urited StateF.

Accepted Answer

C, F, G, H, and J ar

Question 5

With free trade and imports:

Accepted Answer

A) domestic producers gain more than domestic consumers lose. 
B) domestic producers lose more than domestic consumers gain. 
C) domestic consumers gain more than domestic producers lose. 
D) domestic consumers lose more than the domestic producers gain. 
A) domestic producers gain more than domestic consumers lose. 
B) domestic producers lose more than domestic consumers gain. 
C) domestic consumers gain more than domestic producers lose. 
D) domestic consumers lose more than the domestic producers gain.

Question 6

Which of the following would be included in the capital account section of the balance of payments?

Accepted Answer

A) government bond purchases 
B) net investment income 
C) imports and exports of goods 
D) imports and exports of services 
A) government bond purchases 
B) net investment income 
C) imports and exports of goods 
D) imports and exports of services

Question 7

If the exchange rate between euros and dollars were 2 euros per dollar, when a French tourist buys a good valued at $80, its cost in euros would be:

Accepted Answer

A) $160. 
B) $80. 
C) $40. 
D) $78 
A) $160. 
B) $80. 
C) $40. 
D) $78

Question 8

If a nation has a comparative disadvantage in the production of some commodity,

Accepted Answer

A) it can gain from international trade in that commodity only if it has an absolute advantage in that commodity. 
B) it can still gain from international trade in that commodity, by getting it at a lower opportunity cost than if they produced it domestically. 
C) it cannot gain from international trade in the commodity. 
D) it cannot gain from international trade unless it has an absolute advantage in every other commodity. 
A) it can gain from international trade in that commodity only if it has an absolute advantage in that commodity. 
B) it can still gain from international trade in that commodity, by getting it at a lower opportunity cost than if they produced it domestically. 
C) it cannot gain from international trade in the commodity. 
D) it cannot gain from international trade unless it has an absolute advantage in every other commodity.

Question 9

If interest rates rise in the United States relative to those in the rest of the world, the exchange value of the dollar will tend to appreciate.

Accepted Answer

A) True 
 B)False

Question 10

If a Japanese pension fund decides to purchase U.S.government bonds, what is the effect in the exchange market?

Accepted Answer

A) It will increase the supply of Japanese yen. 
B) It will decrease the supply of Japanese yen. 
C) It will increase the demand for Japanese yen. 
D) It will decrease the demand for Japanese yen. 
A) It will increase the supply of Japanese yen. 
B) It will decrease the supply of Japanese yen. 
C) It will increase the demand for Japanese yen. 
D) It will decrease the demand for Japanese yen.

Question 11

Restrictions on the importation of tomatoes reduce the supply available to the U.S.domestic market.Studies indicate that the demand for tomatoes is elastic.Compared to a free-trade situation, the import restrictions cause

Accepted Answer

A) higher tomato prices and an increase in consumer expenditures on tomatoes in the United States. 
B) lower tomato prices and an increase in consumer expenditure on tomatoes in the United States. 
C) lower tomato prices and a reduction in consumer expenditure on tomatoes in the United States. 
D) higher tomato prices and a reduction in consumer expenditure on tomatoes in the United States. 
A) higher tomato prices and an increase in consumer expenditures on tomatoes in the United States. 
B) lower tomato prices and an increase in consumer expenditure on tomatoes in the United States. 
C) lower tomato prices and a reduction in consumer expenditure on tomatoes in the United States. 
D) higher tomato prices and a reduction in consumer expenditure on tomatoes in the United States.

Question 12

The term "dirty float" is used to describe a:

Accepted Answer

A) currency that is allowed to float only in prosperous times. 
B) nation that switches from free to fixed rates of exchange. 
C) black market in foreign currencies. 
D) floating currency that is sometimes changed by government central bank authorities. 
A) currency that is allowed to float only in prosperous times. 
B) nation that switches from free to fixed rates of exchange. 
C) black market in foreign currencies. 
D) floating currency that is sometimes changed by government central bank authorities.

Question 13

Figure 18-A  
-Refer to Figure 18-A.The change in producer surplus from free trade is equal to area:

Accepted Answer

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

Question 14

Why is the demand for foreign currencies known as a derived demand?

Accepted Answer

The demand for foreign currenc

Question 15

If discussing trade, it is ____ which matters, rather than ____.

Accepted Answer

A) absolute advantage; comparative advantage 
B) comparative advantage; absolute advantage 
C) resource cost; comparative advantage 
D) the total amount of the good producible; comparative advantage 
A) absolute advantage; comparative advantage 
B) comparative advantage; absolute advantage 
C) resource cost; comparative advantage 
D) the total amount of the good producible; comparative advantage

Question 16

If vodka and whiskey are substitutes

Accepted Answer

A) a ban on vodka imports would increase the price of whiskey. 
B) the demand for vodka would increase if the price of whiskey fell. 
C) an increase in the tariff imposed on vodka imports would reduce the price of whiskey. 
D) the demand for whiskey would increase if the price of vodka fell. 
A) a ban on vodka imports would increase the price of whiskey. 
B) the demand for vodka would increase if the price of whiskey fell. 
C) an increase in the tariff imposed on vodka imports would reduce the price of whiskey. 
D) the demand for whiskey would increase if the price of vodka fell.

Question 17

If a British student pays her way to attend Harvard University, her actions will:

Accepted Answer

A) create a supply of dollars and a demand for pounds in the foreign currency market. 
B) create a supply of pounds and a demand for dollars in the foreign currency market. 
C) cause the British pound to appreciate. 
D) cause the U.S. dollar to depreciate. 
A) create a supply of dollars and a demand for pounds in the foreign currency market. 
B) create a supply of pounds and a demand for dollars in the foreign currency market. 
C) cause the British pound to appreciate. 
D) cause the U.S. dollar to depreciate.

Question 18

Comparative advantage occurs when a person or a country can produce a good or service at a lower ____ than others.

Accepted Answer

A) marginal cost 
B) variable cost 
C) opportunity cost 
D) total cost 
A) marginal cost 
B) variable cost 
C) opportunity cost 
D) total cost

Question 19

If the rate of inflation overseas falls relative to the rate of inflation in the United States, U.S.net exports will tend to ____, causing the exchange value of the U.S.dollar to ____.

Accepted Answer

A) rise; rise 
B) rise; fall 
C) fall; rise 
D) fall; fall 
A) rise; rise 
B) rise; fall 
C) fall; rise 
D) fall; fall

Question 20

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

Accepted Answer

A) A + B + C 
B) - (B + 
C)  
C) - (A + B + 
C)  
D) - (E + F) 
A) A + B + C 
B) - (B + 
C)  
C) - (A + B + 
C)  
D) - (E + F)

The Bretton Woods Conference:

If two countries produce both wheat and sugar and one country has the comparative advantage in producing wheat than the other country must have the absolute advantage producing sugar.

The difference between the price the seller receives for a good or service and the minimum price he would be willing to accept for that unit is called:

With free trade and imports:

Which of the following would be included in the capital account section of the balance of payments?

If the exchange rate between euros and dollars were 2 euros per dollar, when a French tourist buys a good valued at $80, its cost in euros would be:

If a nation has a comparative disadvantage in the production of some commodity,

If interest rates rise in the United States relative to those in the rest of the world, the exchange value of the dollar will tend to appreciate.

If a Japanese pension fund decides to purchase U.S.government bonds, what is the effect in the exchange market?

Restrictions on the importation of tomatoes reduce the supply available to the U.S.domestic market.Studies indicate that the demand for tomatoes is elastic.Compared to a free-trade situation, the import restrictions cause

The term "dirty float" is used to describe a:

Figure 18-A -Refer to Figure 18-A.The change in producer surplus from free trade is equal to area:

Why is the demand for foreign currencies known as a derived demand?

If discussing trade, it is which matters, rather than .

If vodka and whiskey are substitutes

If a British student pays her way to attend Harvard University, her actions will:

Comparative advantage occurs when a person or a country can produce a good or service at a lower ____ than others.

If the rate of inflation overseas falls relative to the rate of inflation in the United States, U.S.net exports will tend to , causing the exchange value of the U.S.dollar to .

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

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

The Bretton Woods Conference:

If two countries produce both wheat and sugar and one country has the comparative advantage in producing wheat than the other country must have the absolute advantage producing sugar.

The difference between the price the seller receives for a good or service and the minimum price he would be willing to accept for that unit is called:

With free trade and imports:

Which of the following would be included in the capital account section of the balance of payments?

If the exchange rate between euros and dollars were 2 euros per dollar, when a French tourist buys a good valued at $80, its cost in euros would be:

If a nation has a comparative disadvantage in the production of some commodity,

If interest rates rise in the United States relative to those in the rest of the world, the exchange value of the dollar will tend to appreciate.

If a Japanese pension fund decides to purchase U.S.government bonds, what is the effect in the exchange market?

Restrictions on the importation of tomatoes reduce the supply available to the U.S.domestic market.Studies indicate that the demand for tomatoes is elastic.Compared to a free-trade situation, the import restrictions cause

The term "dirty float" is used to describe a:

Figure 18-A -Refer to Figure 18-A.The change in producer surplus from free trade is equal to area:

Why is the demand for foreign currencies known as a derived demand?

If discussing trade, it is ____ which matters, rather than ____.

If vodka and whiskey are substitutes

If a British student pays her way to attend Harvard University, her actions will:

Comparative advantage occurs when a person or a country can produce a good or service at a lower ____ than others.

If the rate of inflation overseas falls relative to the rate of inflation in the United States, U.S.net exports will tend to ____, causing the exchange value of the U.S.dollar to ____.

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

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

If discussing trade, it is which matters, rather than .

If the rate of inflation overseas falls relative to the rate of inflation in the United States, U.S.net exports will tend to , causing the exchange value of the U.S.dollar to .