1. Foreign-produced goods and services that are purchased domestically are called
a.
imports.
b.
exports.
c.
net imports.
d.
net exports.
2. Bill, a U.S. citizen, pays a Spanish architect to design a metal casting factory. Which country’s exports increase?
a.
Spain’s
b.
the U.S.’s
c.
Spain’s and the U.S.’s
d.
neither Spain’s nor the U.S.’s
3. When Jamie, a U.S. citizen, purchases a wool jacket made in Ireland, the purchase is
a.
b.
c.
d.
4. Dave, a U.S. citizen buys a bicycle manufactured in China. Dave’s purchase is
a.
both a U.S. and Chinese export.
b.
both a U.S. and Chinese import.
c.
a U.S. import and a Chinese export.
d.
a U.S. export and a Chinese import.
5. Eric, a resident of Sweden, purchases a book printed in the U.S. Which country’s exports increase?
a.
Sweden’s
b.
the U.S.’s
c.
Sweden’s and the U.S.’s
d.
neither Sweden’s nor the U.S.’s
6. Paul, a Canadian citizen, purchases oranges grown in Florida. This purchase is an example of
a.
a U.S. import and a Canadian export
b.
a U.S. export and a Canadian import
c.
an export for both the U.S. and Canada
d.
an import for both Canada and the U.S.
7. A farmer in Mexico purchases a tractor made in the U.S. This purchase is an example of
a.
a U.S. import and a Mexican export
b.
a U.S. export and a Mexican import
c.
an export for both the U.S. and Mexico
d.
an import for both Mexico and the U.S.
8. Net exports of a country are the value of
a.
goods and services imported minus the value of goods and services exported.
b.
goods and services exported minus the value of goods and services imported.
c.
goods exported minus the value of goods imported.
d.
goods imported minus the value of goods exported.
9. A country sells more goods and services to foreign countries than it buys from them. It has
a.
a trade surplus and positive net exports.
b.
a trade surplus and negative net exports.
c.
a trade deficit and positive net exports.
d.
a trade deficit and negative net exports.
10. A country purchases more goods and services from residents of foreign countries than residents of foreign countries
purchase from it. This country has
a.
a trade surplus and positive net exports.
b.
a trade surplus and negative net exports.
c.
a trade deficit and positive net exports.
d.
a trade deficit and negative net exports.
11. The value of the goods and services Australia purchases from the U.S. are less than the value of goods and services the
U.S. purchases from Australia. The U.S. has
a.
positive net exports with Australia and a trade surplus with Australia.
b.
positive net exports with Australia and a trade deficit with Australia.
c.
negative net exports with Australia and a trade surplus with Australia.
d.
negative net exports with Australia and a trade deficit with Australia.
12. Which of the following both reduce net exports?
a.
exports rise, imports rise
b.
exports rise, imports fall
c.
exports fall, imports rise
d.
exports fall, imports fall
13. One year a country has negative net exports. The next year it still has negative net exports and imports have risen
more than exports.
a.
its trade surplus fell.
b.
its trade surplus rose.
c.
its trade deficit fell.
d.
its trade deficit rose
14. One year a country has positive net exports. The next year it still has positive but larger net exports
a.
its trade surplus fell.
b.
its trade surplus rose.
c.
its trade deficit fell.
d.
its trade deficit rose
15. A country’s trade balance
a.
must be zero.
b.
must be greater than zero.
c.
is greater than zero only if exports are greater than imports.
d.
is greater than zero only if imports are greater than exports.
16. The value of Austria’s exports minus the value of Austria’s imports is called
a.
Austria’s net exports.
b.
Austria’s net imports.
c.
Austria’s foreign portfolio investment
d.
Austria’s foreign direct investment.
17. If Saudi Arabia had negative net exports last year, then it
a.
sold more abroad than it purchased abroad and had a trade surplus.
b.
sold more abroad than it purchased abroad and had a trade deficit.
c.
bought more abroad than it sold abroad and had a trade surplus.
d.
bought more abroad than it sold abroad and had a trade deficit.
18. If France had positive net exports last year, then it
a.
sold more abroad than it purchased abroad and had a trade surplus.
b.
sold more abroad than it purchased abroad and had a trade deficit.
c.
bought more abroad than it sold abroad and had a trade surplus.
d.
bought more abroad than it sold abroad and had a trade deficit.
19. If Germany purchased more goods and services abroad than it sold abroad last year, then it had
a.
positive net exports which is a trade surplus.
b.
positive net exports which is a trade deficit.
c.
negative net exports which is a trade surplus.
d.
negative net exports which is a trade deficit.
20. If Norway sold more goods and services abroad than it purchased from abroad, then it had
a.
positive net exports which is a trade surplus.
b.
positive net exports which is a trade deficit.
c.
negative net exports which is a trade surplus.
d.
negative net exports which is a trade deficit.
21. Suppose that a country imports $90 million worth of goods and services and exports $80 million worth of goods and
services. What is the value of net exports?
a.
$170 million
b.
$80 million
c.
$10 million
d.
–$10 million
22. A country purchases $3 billion of foreign-produced goods and services and sells $2 billion dollars of domestically
produced goods and services to foreign countries. It has
a.
exports of $3 billion and a trade surplus of $1 billion.
b.
exports of $3 billion and a trade deficit of $1 billion.
c.
exports of $2 billion and a trade surplus of $1 billion.
d.
exports of $2 billion and a trade deficit of $1 billion.
23. Oceania buys $100 of wine from Escudia and Escudia buys $80 of wool from Oceania. Suppose this is the only trade
that these countries do. What are the net exports of Oceania and Escudia, in that order?
a.
$80 and $100
b.
$-20 and $20
c.
$20 and -$20
d.
None of the above is correct.
24. If the U.S. has exports of $1.5 trillion and imports of $2.2 trillion, then the U.S.
a.
sells more overseas then it buys from overseas; it has a trade deficit.
b.
sells more overseas then it buys from overseas; it has a trade surplus.
c.
buys more from overseas then it sells overseas; it has a trade deficit.
d.
buys more from overseas then it sells overseas; it has a trade surplus.
25. If U.S. exports are $150 billion and U.S. imports are $100 billion, which of the following is correct?
a.
The U.S. has a trade surplus of $100 billion.
b.
The U.S. has a trade surplus of $50 billion.
c.
The U.S. has a trade deficit of $100 billion.
d.
The U.S. has a trade deficit of $50 billion.
26. If U.S. exports are $300 billion and U.S. imports total $350 billion, which of the following is correct?
a.
The U.S. has a trade surplus of $350 billion.
b.
The U.S. has a trade surplus of $50 billion.
c.
The U.S. has a trade deficit of $350 billion.
d.
The U.S. has a trade deficit of $50 billion.
27. If a country has $2.4 billion of net exports and purchases $4.8 billion of goods and services from foreign countries,
then it has
a.
$7.2 billion of exports and $4.8 billion of imports.
b.
$7.2 billion of imports and $4.8 billion of exports.
c.
$4.8 billion of exports and $2.4 billion of imports.
d.
$4.8 billion of imports and $2.4 billion of exports.
28. Peru has exports of $31.5 million and imports of $30 million. Peru
a.
sells more overseas then it buys from overseas; it has a trade deficit.
b.
sells more overseas then it buys from overseas; it has a trade surplus.
c.
buys more from overseas then it sells overseas; it has a trade deficit.
d.
buys more from overseas then it sells overseas; it has a trade surplus.
29. Egypt has exports of $500 million and imports of $750 million. Egypt
a.
sells more overseas then it buys from overseas; it has a trade deficit.
b.
sells more overseas then it buys from overseas; it has a trade surplus.
c.
buys more from overseas then it sells overseas; it has a trade deficit.
d.
buys more from overseas then it sells overseas; it has a trade surplus.
30. If a country has net exports of $8 billion and sold $40 billion of goods and services abroad, then it has
a.
$48 billion of imports and $40 billion of exports.
b.
$48 billion of exports and $40 billion of imports.
c.
$40 billion of imports and $32 billion of exports.
d.
$40 billion of exports and $32 billion of imports.
Table 31-1
Bolivian Trade Flows
Goods
Services
Purchased
Abroad
$40 billion
Purchased
Abroad
$20 billion
Sold Abroad
$10 billion
Sold Abroad
$25 billion
31. Refer to Table 31–1. What are Bolivia’s exports?
a.
$60 billion
b.
$35 billion
c.
$10 billion
d.
None of the above are correct.
32. Refer to Table 31–1. What are Bolivia’s imports?
a.
$60 billion
b.
$35 billion
c.
$40 billion
d.
None of the above are correct.
33. Refer to Table 31–1. What are Bolivia’s net exports?
a.
$30 billion
b.
$5 billion
c.
–$5 billion
d.
–$25 billion
34. Paine Pharmaceuticals produces medicines in the U.S. Its overseas sales
a.
are an export of the U.S. and increase U.S. net exports.
b.
are an export of the U.S. and decrease U.S. net exports.
c.
are an import of the U.S. and increase U.S. net exports.
d.
are an import of the U.S. and decrease U.S. net exports.
35. Bob traps lobsters in Maine and sells them to a restaurant in Mexico. Other things the same, these sales
a.
increase U.S. net exports and have no effect on Mexican net exports.
b.
increase U.S. net exports and decrease Mexican net exports.
c.
decrease U.S. net exports and have no effect on Mexican net exports.
d.
decrease U.S. net exports and increase Mexican net exports.
36. A U.S. firm sells diesel locomotives to a German railroad. Other things the same, this sale
a.
increases U.S. net exports and decreases German net exports.
b.
decreases U.S. net exports and increases German net exports.
c.
increases U.S. and German net exports.
d.
decreases U.S. and German net exports.
37. A Texas ranch sells beef to a U.S. company that sells it to a grocery chain in Japan. These sales
a.
decrease U.S. exports but increase U.S. net exports.
b.
decrease both U.S. exports and U.S. net exports.
c.
increase both U.S. exports and U.S. net exports.
d.
increase U.S. exports but decrease U.S. net exports.
38. A firm in the United Kingdom hires a firm in the U.S. to train its managers. By itself this transaction
a.
increases U.S. imports and decreases U.S. net exports.
b.
increases U.S. imports and increases U.S. net exports.
c.
increases U.S. exports and decreases U.S. net exports.
d.
increases U.S. exports and increases U.S. net exports.
39. Lydia, a citizen of Italy, produces scarves and purses that she sells to department stores in the United States. Other
things the same, these sales
a.
increase U.S. net exports and have no effect on Italian net exports.
b.
decrease U.S. net exports and have no effect on Italian net exports.
c.
increase U.S. net exports and decrease Italian net exports.
d.
decrease U.S. net exports and increase Italian net exports.
40. A firm in China sells toys to a U.S. department store chain. Other things the same, these sales
a.
increase U.S. net exports and decrease Chinese net exports.
b.
decrease U.S. net exports and increase Chinese net exports.
c.
increase U.S. and Chinese net exports.
d.
decrease U.S. and Chinese net exports.
41. Ivan, a Russian citizen, sells several hundred cases of caviar to a restaurant chain in the United States. By itself, this
sale
a.
increases U.S. net exports and decreases Russian net exports.
b.
increases U.S. net exports and has no effect on Russian net exports.
c.
decreases U.S. net exports and increases Russian net exports.
d.
decreases U.S. net exports and has no effect on Russian net exports.
42. A Swiss company sells chocolates to a retailer in the United States. These sales by themselves
a.
decrease U.S. net export and Swiss net exports.
b.
decrease U.S. net exports and increase Swiss net exports.
c.
increase U.S. and Swiss net exports.
d.
increase U.S. net exports and decrease Swiss net exports.
43. You buy a new car built in Sweden. Other things the same, your purchase by itself
a.
raises both U.S. exports and U.S. net exports.
b.
raises U.S. exports and lowers U.S. net exports.
c.
raises both U.S. imports and U.S. net exports.
d.
raises U.S. imports and lowers U.S. net exports.
44. An increase in U.S. sales of movies to other countries raises U.S.
a.
exports and so raises the U.S. trade balance.
b.
exports and so reduces the U.S. trade balance.
c.
imports and so raises the U.S. trade balance.
d.
imports and so reduces the U.S. trade balance.
45. A company in Panama pays for a U.S. architect to design a factory building. By itself this transaction
a.
increases U.S. exports and so increases the U.S. trade balance.
b.
increases U.S. exports and so decreases the U.S. trade balance.
c.
increases U.S. imports and so increases the U.S. trade balance.
d.
increases U.S. imports and so decreases the U.S. trade balance.
46. If U.S. consumers increase their demand for apples from New Zealand, then other things the same New Zealand’s
a.
imports and net exports rise.
b.
imports rise and net exports fall.
c.
exports and net exports rise.
d.
exports rise and net exports fall.
47. If U.S. consumers decrease their demand for cell phones from Finland, then other things the same Finland’s
a.
exports and net exports fall.
b.
exports fall and net exports rise.
c.
imports and net exports fall.
d.
imports fall and net exports rise.
48. Mike, a U.S. citizen, buys $1,000 worth of olives from Greece. By itself this purchase
a.
increases U.S. imports by $1,000 and increases U.S. net exports by $1,000.
b.
increases U.S. imports by $1,000 and decreases U.S. net exports by $1,000.
c.
increases U.S. exports by $1,000 and increases U.S. net exports by $1,000.
d.
increases U.S. exports by $1,000 and decreases U.S. net exports by $1,000.
49. If a country had a trade surplus of $50 billion and then its exports rose by $30 billion and its imports rose by $20
billion, its net exports would now be
a.
$0 billion.
b.
$20 billion.
c.
$40 billion.
d.
$60 billion.
50. If a country had a trade surplus of $100 billion and then its exports rose by $40 billion and its imports rose by $30
billion, its net exports would now be
a.
$110 billion
b.
$90 billion.
c.
$70 billion.
d.
$60 billion.
51. If a country had a trade deficit of $10 billion and then its exports rose by $20 billion and its imports rose by $10
billion, its net exports would now be
a.
$0
b.
$10 billion.
c.
–$10 billion.
d.
–$20 billion.
52. If a country had a trade deficit of $20 billion and then its exports rose by $7 billion and its imports fell by $10 billion,
its net exports would now be
a.
$37 billion
b.
$3 billion
c.
–$3 billion
d.
–$37 billion
53. Which of the following is correct?
a.
U.S. exports as a percentage of GDP have about tripled since 1950. The U.S. currently has a trade deficit.
b.
U.S. exports as a percentage of GDP have about tripled since 1950. The U.S. currently has a trade surplus.
c.
U.S. exports as a percentage of GDP have about doubled since 1950. The U.S. currently has a trade deficit.
d.
U.S. exports as a percentage of GDP have about doubled since 1950. The U.S. currently has a trade surplus.
54. Which of the following is correct? Since 1950
a.
U.S. exports and U.S. imports each about doubled.
b.
U.S. exports and U.S. imports each about tripled.
c.
U.S. exports about doubled and U.S. imports about tripled.
d.
U.S. exports about tripled and U.S. imports about doubled.
55. Over the past five decades, the U.S. economy has become
a.
more closed.
b.
more open.
c.
less trade-oriented.
d.
more self-sufficient.
56. The increase in international trade in the United States is partly due to
a.
improvements in transportation.
b.
advances in telecommunications.
c.
increased trade of goods with a high value per pound.
d.
All of the above are correct.
57. U.S. international trade has
a.
decreased because of a decrease in the trade of goods with a high value per pound.
b.
decreased because of an increase in the trade of goods with a high value per pound.
c.
increased because of a decrease in trade of goods with a high value per pound.
d.
increased because of an increase in trade of goods with a high value per pound.
58. Net capital outflow equals
a.
the value of domestic assets purchased by foreigners.
b.
the value of foreign assets purchased by domestic residents.
c.
the value of domestic assets purchased by foreigners – the value of foreign assets purchased by domestic
residents.
d.
the value of foreign assets purchased by domestic residents – the value of domestic assets purchased by
foreigners.
59. Net capital outflow is defined as the purchase of
a.
foreign assets by domestic residents minus the purchase of domestic assets by foreign residents.
b.
foreign assets by domestic residents minus the purchase of foreign goods and services by domestic residents.
c.
domestic assets by foreign residents minus the purchase of domestic goods and services by foreign residents.
d.
domestic assets by foreign residents minus the purchase of foreign assets by domestic residents.
60. Net capital outflow measures the imbalance between the amount of
a.
foreign assets held by domestic residents and domestic assets held by foreign residents.
b.
foreign assets bought by domestic residents and the amount of domestic assets bought by foreigners.
c.
foreign assets bought by domestic residents and the amount of domestic goods and services sold to foreigners.
d.
None of the above is correct.
61. Net capital outflow equals the purchase of
a.
foreign assets by domestic residents.
b.
domestic assets by foreign residents.
c.
domestic assets by foreign residents – the purchase of foreign assets by domestic residents
d.
foreign assets by domestic residents – the purchase of domestic assets by foreign residents
62. Net capital outflow equals the difference between a country’s
a.
income and expenditure.
b.
investment and saving.
c.
purchases of foreign goods and services and sales of goods and services abroad.