Question 1

The current international monetary system is best described as a:

Accepted Answer

A) fixed exchange rate system. 
B) gold standard. 
C) dirty float system. 
D) free float system. 
A) fixed exchange rate system. 
B) gold standard. 
C) dirty float system. 
D) free float system.

Question 2

If the United States could produce 1 ton of potatoes or 1 ton of wheat per worker per year, while Ireland could produce 3 tons of potatoes or 2 tons of wheat per worker per year, there can be mutual gains from trade if:

Accepted Answer

A) the United States specializes in potatoes because of its comparative advantage in producing potatoes. 
B) the United States specializes in wheat because of its absolute advantage in producing wheat. 
C) the United States specializes in wheat because of its comparative advantage in producing wheat. 
D) there can be no mutual gains from trade. 
A) the United States specializes in potatoes because of its comparative advantage in producing potatoes. 
B) the United States specializes in wheat because of its absolute advantage in producing wheat. 
C) the United States specializes in wheat because of its comparative advantage in producing wheat. 
D) there can be no mutual gains from trade.

Question 3

Explain how each of the following will affect the relative values of the dollar and the French franc:
 Income growth Figher in the United States than in France. 
Inflation higher in France than in the United States. 
A real interest rate higher in the United States than in France.

Accepted Answer

Income growth higher in the United State

Question 4

Fact Pattern 18-A
Refer to the following data:
Alpha can produce either 18 tons of oranges or 9 tons of apples in a year, while Omega can produce either 16 tons of oranges or 4 tons of apples.
-Refer to Fact Pattern 18-A.Which of the following statements is true?

Accepted Answer

A) Alpha should export to Omega, but Omega should not export to Alpha. 
B) Since Alpha has an absolute advantage in both goods, no mutual gains from trade are possible. 
C) If Alpha specializes in growing apples and Omega specializes in growing oranges, they could both gain by specialization and trade. 
D) If Alpha specializes in growing oranges and Omega specializes in growing apples, they could both gain by specialization and trade. 
E) Since Alpha has a comparative advantage in producing both goods, no mutual gains from trade are possible. 
A) Alpha should export to Omega, but Omega should not export to Alpha. 
B) Since Alpha has an absolute advantage in both goods, no mutual gains from trade are possible. 
C) If Alpha specializes in growing apples and Omega specializes in growing oranges, they could both gain by specialization and trade. 
D) If Alpha specializes in growing oranges and Omega specializes in growing apples, they could both gain by specialization and trade. 
E) Since Alpha has a comparative advantage in producing both goods, no mutual gains from trade are possible.

Question 5

If the dollar price of Euros is lower than the equilibrium price, there will be an excess quantity of Euros ____ at that price, and competition among Euro ____ will push the price of Euros toward equilibrium.

Accepted Answer

A) supplied, sellers. 
B) supplied; buyers. 
C) demanded; sellers. 
D) demanded; buyers. 
A) supplied, sellers. 
B) supplied; buyers. 
C) demanded; sellers. 
D) demanded; buyers.

Question 6

If one nation can produce greater quantities of a good than another nation, it has a(n)

Accepted Answer

A) comparative advantage in producing that good. 
B) absolute advantage in producing that good. 
C) absolute advantage, but a comparative disadvantage in producing that good. 
D) comparative advantage, but an absolute disadvantage in producing that good. 
A) comparative advantage in producing that good. 
B) absolute advantage in producing that good. 
C) absolute advantage, but a comparative disadvantage in producing that good. 
D) comparative advantage, but an absolute disadvantage in producing that good.

Question 7

Which of the following would occur as a result if Europe experienced a lower inflation rate than the U.S.?

Accepted Answer

A) European products would become more expensive to U.S. consumers. 
B) It would decrease the quantity of European goods demanded by Americans. 
C) It would decrease the demand for Euros. 
D) It would decrease the exchange value of Euros. 
E) None of the above would occur. 
A) European products would become more expensive to U.S. consumers. 
B) It would decrease the quantity of European goods demanded by Americans. 
C) It would decrease the demand for Euros. 
D) It would decrease the exchange value of Euros. 
E) None of the above would occur.

Question 8

Which of the following examples would lead to a demand for euros?

Accepted Answer

A) Judy Potter, an American, wants to purchase a German automobile. 
B) Jim Potter, Judy's husband, wants to purchase German stocks. 
C) IBM, Judy's employer, wants to buy a small computer firm in Germany. 
D) All of the above. 
A) Judy Potter, an American, wants to purchase a German automobile. 
B) Jim Potter, Judy's husband, wants to purchase German stocks. 
C) IBM, Judy's employer, wants to buy a small computer firm in Germany. 
D) All of the above.

Question 9

Economists sometimes say that the current exchange rate system is a dirty float system.What does this mean?

Accepted Answer

The dirty float system means that fluctu

Question 10

On January 7, 2009, the U.S.dollar was worth 0.70 euros.How many U.S.dollars did it take to buy one euro?

Accepted Answer

A) 0.70 
B) 1.27 
C) 1.43 
D) 1.70 
E) 7.00 
A) 0.70 
B) 1.27 
C) 1.43 
D) 1.70 
E) 7.00

Question 11

Reducing existing tariffs on tomatoes would:

Accepted Answer

A) reduce imports of tomatoes. 
B) increase U.S. consumption of domestically produced tomatoes. 
C) decrease total U.S. consumption of tomatoes. 
D) do all of the above. 
E) do none of the above. 
A) reduce imports of tomatoes. 
B) increase U.S. consumption of domestically produced tomatoes. 
C) decrease total U.S. consumption of tomatoes. 
D) do all of the above. 
E) do none of the above.

Question 12

The ____ curve helps us to see the benefits that arise from specialization and trade.

Accepted Answer

A) supply 
B) demand 
C) production possibilities 
D) variable cost 
A) supply 
B) demand 
C) production possibilities 
D) variable cost

Question 13

The difference between the price the consumer is willing to pay for a good or service and what he would have to pay 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 14

Since the advent of flexible exchange rates, world trade has not only continued but also expanded.

Accepted Answer

A) True 
 B)False

Question 15

An appreciation of the exchange value of the U.S.dollar would:

Accepted Answer

A) increase the dollar prices of U.S. imports and the foreign cost of exports from the U.S. 
B) decrease the dollar prices of U.S. imports and the foreign cost of exports from the U.S. 
C) increase the dollar prices of U.S. imports, but decrease the foreign cost of exports from the U.S. 
D) decrease the dollar prices of U.S. imports, but increase the foreign cost of exports from the U.S. 
A) increase the dollar prices of U.S. imports and the foreign cost of exports from the U.S. 
B) decrease the dollar prices of U.S. imports and the foreign cost of exports from the U.S. 
C) increase the dollar prices of U.S. imports, but decrease the foreign cost of exports from the U.S. 
D) decrease the dollar prices of U.S. imports, but increase the foreign cost of exports from the U.S.

Question 16

When a country allows trade and becomes an exporter of goods consumers gain more than producers lose.

Accepted Answer

A) True 
 B)False

Question 17

A country would tend to experience currency depreciation relative to other countries if:

Accepted Answer

A) the profitability of investments within the country increases relative to the rest of the world. 
B) people in the foreign currency markets expect the value of the currency to rise in the near future. 
C) the foreign demand for its exports decreases. 
D) none of the above. 
A) the profitability of investments within the country increases relative to the rest of the world. 
B) people in the foreign currency markets expect the value of the currency to rise in the near future. 
C) the foreign demand for its exports decreases. 
D) none of the above.

Question 18

Imposing a quota on metal softball bats shipped into the United States would likely:

Accepted Answer

A) increase the price of the bats but decrease the quantity of domestically made bats purchased in the United States. 
B) increase the price of the bats and the quantity of domestically made bats purchased in the United States. 
C) leave the price of the bats unchanged but decrease the quantity purchased in the United States. 
D) leave both the price of bats and the quantity purchased in the United States unchanged. 
A) increase the price of the bats but decrease the quantity of domestically made bats purchased in the United States. 
B) increase the price of the bats and the quantity of domestically made bats purchased in the United States. 
C) leave the price of the bats unchanged but decrease the quantity purchased in the United States. 
D) leave both the price of bats and the quantity purchased in the United States unchanged.

Question 19

If opening up international trade resulted in the U.S.becoming a wheat exporter, relative to the prior no-trade situation, the U.S.domestic price of wheat:

Accepted Answer

A) would rise, but domestic output would fall. 
B) would decline, but domestic output would rise. 
C) would decline, as would domestic output. 
D) would rise, as would domestic output. 
A) would rise, but domestic output would fall. 
B) would decline, but domestic output would rise. 
C) would decline, as would domestic output. 
D) would rise, as would domestic output.

Question 20

Which term refers to the efforts by producers to gain profits from government protections such as tariffs and import quotas?

Accepted Answer

A) lobbying 
B) rent seeking 
C) profit seeking 
D) revenue seeking 
A) lobbying 
B) rent seeking 
C) profit seeking 
D) revenue seeking

The current international monetary system is best described as a:

If the United States could produce 1 ton of potatoes or 1 ton of wheat per worker per year, while Ireland could produce 3 tons of potatoes or 2 tons of wheat per worker per year, there can be mutual gains from trade if:

Explain how each of the following will affect the relative values of the dollar and the French franc: Income growth Figher in the United States than in France. Inflation higher in France than in the United States. A real interest rate higher in the United States than in France.

Fact Pattern 18-A Refer to the following data: Alpha can produce either 18 tons of oranges or 9 tons of apples in a year, while Omega can produce either 16 tons of oranges or 4 tons of apples. -Refer to Fact Pattern 18-A.Which of the following statements is true?

If the dollar price of Euros is lower than the equilibrium price, there will be an excess quantity of Euros at that price, and competition among Euro will push the price of Euros toward equilibrium.

If one nation can produce greater quantities of a good than another nation, it has a(n)

Which of the following would occur as a result if Europe experienced a lower inflation rate than the U.S.?

Which of the following examples would lead to a demand for euros?

Economists sometimes say that the current exchange rate system is a dirty float system.What does this mean?

On January 7, 2009, the U.S.dollar was worth 0.70 euros.How many U.S.dollars did it take to buy one euro?

Reducing existing tariffs on tomatoes would:

The ____ curve helps us to see the benefits that arise from specialization and trade.

The difference between the price the consumer is willing to pay for a good or service and what he would have to pay for that unit is called:

Since the advent of flexible exchange rates, world trade has not only continued but also expanded.

An appreciation of the exchange value of the U.S.dollar would:

When a country allows trade and becomes an exporter of goods consumers gain more than producers lose.

A country would tend to experience currency depreciation relative to other countries if:

Imposing a quota on metal softball bats shipped into the United States would likely:

If opening up international trade resulted in the U.S.becoming a wheat exporter, relative to the prior no-trade situation, the U.S.domestic price of wheat:

Which term refers to the efforts by producers to gain profits from government protections such as tariffs and import quotas?

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 current international monetary system is best described as a:

If the United States could produce 1 ton of potatoes or 1 ton of wheat per worker per year, while Ireland could produce 3 tons of potatoes or 2 tons of wheat per worker per year, there can be mutual gains from trade if:

Explain how each of the following will affect the relative values of the dollar and the French franc: Income growth Figher in the United States than in France. Inflation higher in France than in the United States. A real interest rate higher in the United States than in France.

Fact Pattern 18-A Refer to the following data: Alpha can produce either 18 tons of oranges or 9 tons of apples in a year, while Omega can produce either 16 tons of oranges or 4 tons of apples. -Refer to Fact Pattern 18-A.Which of the following statements is true?

If the dollar price of Euros is lower than the equilibrium price, there will be an excess quantity of Euros ____ at that price, and competition among Euro ____ will push the price of Euros toward equilibrium.

If one nation can produce greater quantities of a good than another nation, it has a(n)

Which of the following would occur as a result if Europe experienced a lower inflation rate than the U.S.?

Which of the following examples would lead to a demand for euros?

Economists sometimes say that the current exchange rate system is a dirty float system.What does this mean?

On January 7, 2009, the U.S.dollar was worth 0.70 euros.How many U.S.dollars did it take to buy one euro?

Reducing existing tariffs on tomatoes would:

The ____ curve helps us to see the benefits that arise from specialization and trade.

The difference between the price the consumer is willing to pay for a good or service and what he would have to pay for that unit is called:

Since the advent of flexible exchange rates, world trade has not only continued but also expanded.

An appreciation of the exchange value of the U.S.dollar would:

When a country allows trade and becomes an exporter of goods consumers gain more than producers lose.

A country would tend to experience currency depreciation relative to other countries if:

Imposing a quota on metal softball bats shipped into the United States would likely:

If opening up international trade resulted in the U.S.becoming a wheat exporter, relative to the prior no-trade situation, the U.S.domestic price of wheat:

Which term refers to the efforts by producers to gain profits from government protections such as tariffs and import quotas?

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 the dollar price of Euros is lower than the equilibrium price, there will be an excess quantity of Euros at that price, and competition among Euro will push the price of Euros toward equilibrium.