Question 1

What is autarky?

Accepted Answer

Autarky is a situation in which a country does not trade with other countries.

Question 2

A situation in which a country does not trade with other countries is called

Accepted Answer

A) autarky. 
B) self-actualization. 
C) autonomy. 
D) independence. 
A) autarky. 
B) self-actualization. 
C) autonomy. 
D) independence. A

Question 3

In order to avoid the imposition of other types of trade barriers,foreign producers will sometimes agree to voluntary export restraints.With voluntary export restraints,foreign producers

Accepted Answer

A) agree to meet specific quality standards required by the importing country. 
B) limit their exports to a country. 
C) pay a tax on all products they export. 
D) must agree to import an equal quantity of products that they export. 
A) agree to meet specific quality standards required by the importing country. 
B) limit their exports to a country. 
C) pay a tax on all products they export. 
D) must agree to import an equal quantity of products that they export. B

Question 4

The recession of 2007-2009 decreased the demand for imports in Japan,which caused the ________ curve for the yen to ________,increasing the exchange rate and the value of the yen.

Accepted Answer

A) supply;right 
B) supply;left 
C) demand;right 
D) demand;left 
A) supply;right 
B) supply;left 
C) demand;right 
D) demand;left

Question 5

Countries that engage in trade will tend to specialize in the production of goods and services in which they have ________ and will ________ these goods and services.

Accepted Answer

A) a comparative advantage;import 
B) an absolute advantage;export 
C) a comparative advantage;export 
D) an absolute advantage;import 
A) a comparative advantage;import 
B) an absolute advantage;export 
C) a comparative advantage;export 
D) an absolute advantage;import

Question 6

An increase in capital inflows will

Accepted Answer

A) increase net foreign investment. 
B) increase capital outflows. 
C) decrease capital outflows. 
D) increase the equilibrium exchange rate. 
A) increase net foreign investment. 
B) increase capital outflows. 
C) decrease capital outflows. 
D) increase the equilibrium exchange rate.

Question 7

Disagreements about whether the U.S.government should regulate international trade

Accepted Answer

A) began during the Great Depression. 
B) began after World War I when government officials no longer believed in isolationism. 
C) date back to the beginning of the country. 
D) did not occur until the end of the Mexican War in 1848. 
A) began during the Great Depression. 
B) began after World War I when government officials no longer believed in isolationism. 
C) date back to the beginning of the country. 
D) did not occur until the end of the Mexican War in 1848.

Question 8

Holding all else constant,a rise in interest rates in the United States will cause the dollar to appreciate in international exchange markets.

Accepted Answer

A) True 
 B)False

Question 9

You're traveling in Ireland and are thinking about buying a new digital camera.You've decided you'd be willing to pay $125 for a new camera,but cameras in Ireland are all priced in euros.If the exchange rate is 0.85 euros per dollar,what's the highest price in euros you'd be willing to pay for a camera?

Accepted Answer

A) 105 euros 
B) 106.25 euros 
C) 110.15 euros 
D) 147 euros 
A) 105 euros 
B) 106.25 euros 
C) 110.15 euros 
D) 147 euros

Question 10

Which of the following statements is true?

Accepted Answer

A) Exports benefit trading countries because exports create jobs.Imports do not benefit trading countries because they result in a loss of jobs. 
B) Each year China exports about 50 percent of its wheat crop and 40 percent of its rice crop. 
C) Most of the leading exporting countries are large,high-income countries. 
D) All sectors of the U.S.economy are affected equally by international trade. 
A) Exports benefit trading countries because exports create jobs.Imports do not benefit trading countries because they result in a loss of jobs. 
B) Each year China exports about 50 percent of its wheat crop and 40 percent of its rice crop. 
C) Most of the leading exporting countries are large,high-income countries. 
D) All sectors of the U.S.economy are affected equally by international trade.

Question 11

Figure 19-6  
-Refer to Figure 19-6.The depreciation of the dollar is represented as a movement from ________.

Accepted Answer

A) B to A 
B) D to C 
C) B to C 
D) A to C 
E) A to B 
A) B to A 
B) D to C 
C) B to C 
D) A to C 
E) A to B

Question 12

If Canada imports fishing poles from Mexico and Mexico imports bacon from Canada,which of the following would explain this pattern of trade?

Accepted Answer

A) Mexico has a lower opportunity cost of producing bacon than Mexico and Mexico has a comparative advantage in producing fishing poles. 
B) The opportunity cost of producing fishing poles in Canada is higher than the opportunity cost of producing bacon in Mexico. 
C) Mexico must have an absolute advantage in producing fishing poles and Canada must have an absolute advantage in bacon. 
D) Mexico has a higher opportunity cost of producing fishing poles than Canada,and Canada has a higher opportunity cost of producing bacon. 
A) Mexico has a lower opportunity cost of producing bacon than Mexico and Mexico has a comparative advantage in producing fishing poles. 
B) The opportunity cost of producing fishing poles in Canada is higher than the opportunity cost of producing bacon in Mexico. 
C) Mexico must have an absolute advantage in producing fishing poles and Canada must have an absolute advantage in bacon. 
D) Mexico has a higher opportunity cost of producing fishing poles than Canada,and Canada has a higher opportunity cost of producing bacon.

Question 13

When Roxanne,a U.S.citizen,purchases a designer dress from Barneys of New York that was made in Milan,the purchase is

Accepted Answer

A) both a U.S.and an Italian import. 
B) a U.S.import and an Italian export. 
C) a U.S.export and an Italian import. 
D) neither an export nor an import for either country. 
A) both a U.S.and an Italian import. 
B) a U.S.import and an Italian export. 
C) a U.S.export and an Italian import. 
D) neither an export nor an import for either country.

Question 14

One reason for the success that firms have in getting the government to erect barriers to foreign competition is that jobs lost to foreign competition are easy to identify but jobs created by foreign trade are often hard to identify.Which of the following is a second reason?

Accepted Answer

A) The costs that tariffs and quotas impose on consumers are large in total but relatively small per person. 
B) People who benefit from foreign trade tend not to vote in elections;people who are harmed by foreign trade are much more likely to vote. 
C) Firms that benefit from trade barriers have more money to lobby government officials to support the barriers than do firms that are harmed by trade barriers. 
D) The benefits from free trade are less than the costs. 
A) The costs that tariffs and quotas impose on consumers are large in total but relatively small per person. 
B) People who benefit from foreign trade tend not to vote in elections;people who are harmed by foreign trade are much more likely to vote. 
C) Firms that benefit from trade barriers have more money to lobby government officials to support the barriers than do firms that are harmed by trade barriers. 
D) The benefits from free trade are less than the costs.

Question 15

Which of the following statements is true?

Accepted Answer

A) All individuals in both countries are made better off as a result of international trade. 
B) Within each country,some individuals are made better off as a result of international trade,but one of the countries will be worse off overall. 
C) Although some individuals are made better off as a result of international trade,both countries may be made worse off overall. 
D) Each country as a whole is made better off as a result of international trade,but individuals within each country may be made worse off. 
A) All individuals in both countries are made better off as a result of international trade. 
B) Within each country,some individuals are made better off as a result of international trade,but one of the countries will be worse off overall. 
C) Although some individuals are made better off as a result of international trade,both countries may be made worse off overall. 
D) Each country as a whole is made better off as a result of international trade,but individuals within each country may be made worse off.

Question 16

Holding all else constant,an economic expansion in Mexico should decrease the demand for U.S.dollars.

Accepted Answer

A) True 
 B)False

Question 17

Figure 19-3   Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 19-3 illustrates the impact of the quota.
-Refer to Figure 19-3.What is the area of domestic producer surplus after the imposition of a quota?

Accepted Answer

A) B 
B) B + C 
C) B + E + I + J + M 
D) E + I + J + M 
A) B 
B) B + C 
C) B + E + I + J + M 
D) E + I + J + M

Question 18

In the U.S.steel market,a "Buy American" provision in the 2009 stimulus package would

Accepted Answer

A) convert some consumer surplus to deadweight loss. 
B) transfer some deadweight loss to producer surplus. 
C) transfer some producer surplus to consumer surplus. 
D) reduce the producer surplus received by foreign manufacturers. 
A) convert some consumer surplus to deadweight loss. 
B) transfer some deadweight loss to producer surplus. 
C) transfer some producer surplus to consumer surplus. 
D) reduce the producer surplus received by foreign manufacturers.

Question 19

If there is currently a surplus of dollars,which of the following would you expect to see in the foreign exchange market?

Accepted Answer

A) The dollar will appreciate. 
B) The dollar will depreciate. 
C) There will be a decrease in the demand for dollars. 
D) There will be a decrease in the supply of dollars. 
A) The dollar will appreciate. 
B) The dollar will depreciate. 
C) There will be a decrease in the demand for dollars. 
D) There will be a decrease in the supply of dollars.

Question 20

Once a country has lost its comparative advantage in producing a good,its income will be ________ and its economy will be ________ if it switches from producing the good to importing it.

Accepted Answer

A) higher;less efficient 
B) higher;more efficient 
C) lower;less efficient 
D) lower;more efficient 
A) higher;less efficient 
B) higher;more efficient 
C) lower;less efficient 
D) lower;more efficient

What is autarky?

A situation in which a country does not trade with other countries is called

In order to avoid the imposition of other types of trade barriers,foreign producers will sometimes agree to voluntary export restraints.With voluntary export restraints,foreign producers

The recession of 2007-2009 decreased the demand for imports in Japan,which caused the curve for the yen to ,increasing the exchange rate and the value of the yen.

Countries that engage in trade will tend to specialize in the production of goods and services in which they have and will these goods and services.

An increase in capital inflows will

Disagreements about whether the U.S.government should regulate international trade

Holding all else constant,a rise in interest rates in the United States will cause the dollar to appreciate in international exchange markets.

Which of the following statements is true?

Figure 19-6 -Refer to Figure 19-6.The depreciation of the dollar is represented as a movement from ________.

If Canada imports fishing poles from Mexico and Mexico imports bacon from Canada,which of the following would explain this pattern of trade?

When Roxanne,a U.S.citizen,purchases a designer dress from Barneys of New York that was made in Milan,the purchase is

One reason for the success that firms have in getting the government to erect barriers to foreign competition is that jobs lost to foreign competition are easy to identify but jobs created by foreign trade are often hard to identify.Which of the following is a second reason?

Which of the following statements is true?

Holding all else constant,an economic expansion in Mexico should decrease the demand for U.S.dollars.

Figure 19-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 19-3 illustrates the impact of the quota. -Refer to Figure 19-3.What is the area of domestic producer surplus after the imposition of a quota?

In the U.S.steel market,a "Buy American" provision in the 2009 stimulus package would

If there is currently a surplus of dollars,which of the following would you expect to see in the foreign exchange market?

Once a country has lost its comparative advantage in producing a good,its income will be and its economy will be if it switches from producing the good to importing it.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Filters

Exam 19: Comparative Advantage,international Trade,and Exchange Rates

What is autarky?

A situation in which a country does not trade with other countries is called

In order to avoid the imposition of other types of trade barriers,foreign producers will sometimes agree to voluntary export restraints.With voluntary export restraints,foreign producers

The recession of 2007-2009 decreased the demand for imports in Japan,which caused the ________ curve for the yen to ________,increasing the exchange rate and the value of the yen.

Countries that engage in trade will tend to specialize in the production of goods and services in which they have ________ and will ________ these goods and services.

An increase in capital inflows will

Disagreements about whether the U.S.government should regulate international trade

Holding all else constant,a rise in interest rates in the United States will cause the dollar to appreciate in international exchange markets.

Which of the following statements is true?

Figure 19-6 -Refer to Figure 19-6.The depreciation of the dollar is represented as a movement from ________.

If Canada imports fishing poles from Mexico and Mexico imports bacon from Canada,which of the following would explain this pattern of trade?

When Roxanne,a U.S.citizen,purchases a designer dress from Barneys of New York that was made in Milan,the purchase is

One reason for the success that firms have in getting the government to erect barriers to foreign competition is that jobs lost to foreign competition are easy to identify but jobs created by foreign trade are often hard to identify.Which of the following is a second reason?

Which of the following statements is true?

Holding all else constant,an economic expansion in Mexico should decrease the demand for U.S.dollars.

Figure 19-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts.Figure 19-3 illustrates the impact of the quota. -Refer to Figure 19-3.What is the area of domestic producer surplus after the imposition of a quota?

In the U.S.steel market,a "Buy American" provision in the 2009 stimulus package would

If there is currently a surplus of dollars,which of the following would you expect to see in the foreign exchange market?

Once a country has lost its comparative advantage in producing a good,its income will be ________ and its economy will be ________ if it switches from producing the good to importing it.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Filters

The recession of 2007-2009 decreased the demand for imports in Japan,which caused the curve for the yen to ,increasing the exchange rate and the value of the yen.

Countries that engage in trade will tend to specialize in the production of goods and services in which they have and will these goods and services.

Once a country has lost its comparative advantage in producing a good,its income will be and its economy will be if it switches from producing the good to importing it.