Exam 20: Economic Growth in the Global Economy

Tariffs and other trade restrictions increase the domestic scarcity of products from abroad. Such policies benefit domestic producers of the restricted products at the expense of domestic consumers. This statement:

The intended gains from U.S. tariffs and other trade restrictions can backfire if foreign governments retaliate by imposing additional trade restrictions on U.S. goods sold in their countries.

"Tariffs are necessary for reasons of national security." Discuss the validity of this statement.

What is the law of comparative advantage, and why is it important in international trade?

If a nation does not have an absolute advantage in producing anything, it

In Bangladesh one person can produce 330 pounds of rice or 110 shirts in one year. In Singapore one person can produce 400 pounds of rice or 200 shirts in one year. Which of the following statements is true?

Iceland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Lavaland can produce 24 units of food per year or 12 units of clothing. Which of the following is true?

If it can be shown that a tariff on steel imports will increase employment in the steel industry, we can be sure that the effect of the tariff on U.S. employment will also be positive.

Which of the following is the best example of a tariff?

Compared to the no-trade situation, when a country exports a good:

The world price of a commodity will settle at the level where

What benefits are to be gained from countries producing according to the law of comparative advantage? What if a country is absolutely more productive in all goods?

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

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

Which of the following is not an argument favoring tariffs?

The United States is the world's leading grain-producing nation. Exporting grain causes the:

If a nation has "cheap" labor,

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

Which of the following is one reason why trade makes all parties better off?

If an exporter's supply curve of a commodity is upward sloping, and if a change in import demands in other countries leads them to increase their exports, other things equal, we would expect