Question 1

The World Trade Organization (WTO)promotes foreign trade and investment,or globalisation.In recent years opposition to globalisation has led to violent protests at meetings of the WTO.One reason for these anti-globalisation protests is

Accepted Answer

A)  foreign trade and investment are examples of zero-sum games. 
B)  protesters believe that globalisation will result in a return to communism in developing countries. 
C)  protesters believe that free trade destroys the distinctive cultures of many countries. 
D)  protesters object to the loss of intellectual property (such as software programs and movies) that results from foreign trade and investment.

Question 2

Anti-globalisation and protectionism are both arguments against free trade.How do these two arguments differ?

Accepted Answer

The answer of Anti-globalisation and protectionism are both arguments against...

Question 3

Table 18-3
  Bryce and Tina are artisans who produce homemade candles and soap. Table 18-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month.
-Refer to Table 18-3.Select the statement that accurately interprets the data in the table.

Accepted Answer

A)  Bryce has an absolute advantage in making candles and soap. 
B)  Tina has an absolute advantage in making candles and soap. 
C)  Neither Bryce nor Tina has an absolute advantage in making candles. 
D)  Neither Bryce nor Tina has an absolute advantage in making soap.

Question 4

Table 18-5
  Table 18-5 shows the output per week for bows and arrows by Ahmet and MyLinh.
-Refer to Table 18-5.
a.Which person has an absolute advantage in the production of bows? Of arrows?
b.Which person has a comparative advantage in the production of bows?
c.Which person has a comparative advantage in the production of arrows?

Accepted Answer

The answer of Table 18-5
  Table 18-5 shows the...

Question 5

A tariff is a tax imposed by a government on

Accepted Answer

A)  exports. 
B)  services. 
C)  imports. 
D)  luxury items.

Question 6

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

Accepted Answer

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

Question 7

Table 18-6
Production and
Consumption Production
Without Trade With Trade
  Denmark and Belize can produce both clocks and hats. Table 18-6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 18-6.Prior to trade,what was the opportunity cost to produce 1 clock in Belize?

Accepted Answer

A)  1/6 of a hat 
B)  2/3 of a hat 
C)  1.5 hats 
D)  6 hats

Question 8

Exports are domestically produced goods and services

Accepted Answer

A)  sold to other countries. 
B)  sold to the government. 
C)  sold at home. 
D)  which are used to produce other goods and services.

Question 9

Table 18-6
Production and
Consumption Production
Without Trade With Trade
  Denmark and Belize can produce both clocks and hats. Table 18-6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 18-6.If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded,how many clocks will Belize consume?

Accepted Answer

A)  150 
B)  270 
C)  930 
D)  1200

Question 10

Which of the following is not a source of comparative advantage?

Accepted Answer

A)  Relative abundance of labour and capital 
B)  Technology 
C)  Climate and natural resources 
D)  A strong foreign currency exchange rate

Question 11

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

Exam 18: Fiscal Policy

The World Trade Organization (WTO) promotes foreign trade and investment,or globalisation.In recent years opposition to globalisation has led to violent protests at meetings of the WTO.One reason for these anti-globalisation protests is

Anti-globalisation and protectionism are both arguments against free trade.How do these two arguments differ?

Table 18-3 Bryce and Tina are artisans who produce homemade candles and soap. Table 18-3 lists the number of candles and bars of soap Bryce and Tina can each produce in one month. -Refer to Table 18-3.Select the statement that accurately interprets the data in the table.

A tariff is a tax imposed by a government on

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

Exports are domestically produced goods and services

Which of the following is not a source of comparative advantage?

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.