47. If Germany exports $100,000 of sauerkraut to Jamaica and purchases $100,000 of Blue Mountain coffee beans
from Jamaica, Germany has
a. an overall favorable balance of trade.
b. an overall unfavorable balance of trade.
c. a favorable balance of trade with Jamaica.
d. neither a favorable nor an unfavorable balance of trade with Jamaica.
e. an unfavorable balance of trade with Jamaica.
48. If the Land of Mercury had total exports of $150 billion and total imports of $234 billion, it had a
a. comparative advantage.
b. trade deficit.
c. balance of payments.
d. negative output.
e. positive balance of trade.
49. The United States sells industrial supplies and materials to many nations around the world. The United States thus
engages in
a. dumping.
b. tariffing.
c. importing.
d. exporting.
e. deficit trading.
50. Which of the following best defines balance of trade?
a. Purchasing products in other countries and bringing them into one’s own country.
b. The total value of a nation‘s exports minus the total value of its imports over some period of time.
c. The total flow of money into the country minus the total flow of money out of the country over some period
of time.
d. The ability to specialize in the production of a specific product and trade it for other needed products.
e. The ability to produce a certain product more efficiently than any other nation.
51. The United States buys automobiles from Japan and Germany and petroleum products from many OPEC nations.
The United States thus engages in
a. dumping.
b. tariffing.
c. importing.
d. exporting.
e. deficit trading.
52. A small country is just beginning its international trade activities. In so doing, it wants to
favorable balance of trade.
a. provide markets for its products
b. have its name in The Wall Street Journal
c. have its exports taxed
d. be involved in international politics
e. control the governments of other countries
and to develop a
53. An unfavorable trade balance is called a(n)
a. balance of trade.
b. trade deficit.
c. currency devaluation.
d. balance of payments.
e. import balance.
54. When Johnson & Johnson Vision Care, Inc., located in Jacksonville, Florida, sells its ACUVUE contact lenses to
people in London, England, the company
a. is importing the lenses.
b. is exporting the lenses.
c. has an absolute advantage.
d. is increasing the balance–of-trade deficit.
e. is making a big mistake.
55. When a coffee chain in Portland, Oregon purchases coffee from Colombia, South America, it
a. is importing the coffee.
b. is exporting the coffee.
c. has an absolute advantage.
d. is decreasing the balance–of–trade deficit.
e. is making a big mistake.
56. If the United States exports $100 worth of diamonds to the Kingdom of Mocha and imports $80 worth of bows and
arrows, it has a(n)
a. unfavorable balance of trade.
b. trade deficit.
c. trade surplus.
d. negative cash flow.
e. export slide.
57. When a country imports more than it exports, it has a(n)
a. trade surplus.
b. favorable balance of trade.
c. favorable exchange role.
d. unfavorable balance of trade.
e. favorable balance of payments.
58. An unfavorable balance of trade occurs when
a. exports are greater than imports.
b. imports are greater than exports.
c. the total outflow of money is greater than the total inflow of money.
d. the total outflow of money is less than the total inflow of money.
e. exports equal imports.
59. When a country exports more than it imports, it has a(n)
a. trade deficit.
b. favorable balance of trade.
c. unfavorable exchange rate.
d. unfavorable balance of trade.
e. unfavorable balance of payments.
60. When Serena from the United States flies to Scotland on a Canadian airline, stays in an Edinburgh hotel, and buys
many wool sweaters from Scotland to bring home, she is
a. decreasing the trade deficit.
b. being disloyal and unpatriotic.
c. contributing to the negative balance of payments.
d. buying American-made goods.
e. buying American-produced services.
61. A favorable balance of payments means that
a. exports exceed imports.
b. imports exceed exports.
c. payments exceed trade.
d. exports and other payments exceed imports and other receipts.
e. total receipts exceed total payments.
62. Balance of payments is a concept than balance of trade.
a. more difficult
b. less difficult
c. nearly identical
d. broader
e. narrower
63. Japanese tourists come to experience the magic of Disney World and other attractions around Orlando, Florida.
These tourists are
a. contributing to the United States’ deficit balance of payments.
b. helping increase the balance of payments for Japan.
c. exporting products and services back to Japan.
d. further decreasing the United States’ balance of payments.
e. helping the United States‘ balance of payments.
64. The total flow of money into a country minus the total flow of money out of the country over some period of time is
called the country’s
a. trade deficit.
b. balance of payments.
c. unfavorable balance.
d. balance of trade.
e. favorable balance.
65. The payments portion of the balance of payments—that is, payments made by the United States—does not include
a. exports.
b. imports.
c. military spending.
d. foreign aid.
e. investments.
66. Another name for an import duty is a(n)
a. tariff.
b. embargo.
c. devaluation.
d. quota.
e. limitation.
67. When the United States levies a tax on textiles from India, this tax is a type of
a. export duty.
b. barter.
c. import.
d. tariff.
e. responsibility.
68. The United States wishes to import no more than 100 million tons of sugar from India in any given year. The type
of import restriction it should impose is a(n)
a. import duty.
b. foreign exchange control.
c. import quota.
d. embargo.
e. export duty.
69. The U.S. government imposes a tax on imported automobiles from Japan, Korea, Germany, and other foreign
nations to increase government funds. This is best described as a(n)
a. protective tariff.
b. revenue tariff.
c. dumping duty.
d. import quota.
e. excise tax.
70. Suppose France imposes a tax on agricultural products from the United States to help its own farmers. This
describes a(n)
a. revenue tariff.
b. preservation tariff.
c. embargo.
d. nontariff barrier.
e. protective tariff.
71. is the exportation of large quantities of a product at a price lower than that of the same product in the home
market.
a. Embargo
b. Duty
c. Dumping
d. Export quota
e. Dropping
72. China is selling school supplies in the United States for very low prices, even lower than the prevailing prices in
China, and thus making it extremely difficult for American manufacturers to compete. This is referred to as
a. exporting.
b. importing.
c. an embargo.
d. dropping.
e. dumping.
73. When the United States levies a tax on coffee from Colombia, this type of tax is a(n)
a. export duty.
b. barter.
c. import.
d. tariff.
e. responsibility.
74. Taiwanese manufacturers are dumping toys in Germany. What will happen to German toy manufacturers if the
German government allows this dumping to continue?
a. They will be faced with the highest demand ever.
b. They will become more competitive.
c. They will be put out of business because they cannot compete with the prices.
d. They will try to dump their toys in other countries.
e. Their revenues will decrease, but their long-term success will not be affected.
75. Any measure imposed by a government to favor domestic products over foreign products not involving taxes is a(n)
a. import duty.
b. nonmonetary restriction.
c. embargo.
d. restriction of trade.
e. nontariff barrier.
76. The United States bans Cuban cigars and other Cuban products from entering the United States due to political
difficulties. This action is called a(n)
a. embargo.
b. import quota.
c. trade ban.
d. foreign-exchange control.
e. import duty.
77. The Saudi Arabian government does not allow the consumption of alcoholic beverages within its country. The Saudi
Arabian government is imposing a(n)
a. import quota.
b. currency devaluation.
c. prohibition.
d. embargo.
e. dumping restriction.
78. An import duty has the effect of all of the following except
a. reducing the number of units exported.
b. raising the price of the product in the importing nation.
c. reducing the number of units imported.
d. creating a trade restriction.
e. protecting a domestic industry from competition.
79. A complete halt to trading with a particular nation or in a particular product is called a(n)
a. embargo.
b. stoppage.
c. stay.
d. closure.
e. barricade.
80. A limit on the amount of a particular good that may be brought into a country during a given period of time is called
a(n)
a. import duty.
b. import deficit.
c. trade embargo.
d. import tariff.
e. import quota.
81. If it wants to reduce the dollars flowing out of the country, the United States can limit the number of Japanese cars
being imported by imposing a(n)
a. free trade zone.
b. GATT.
c. trade deficit.
d. balance of trade.
e. import quota.
82. When the U.S. government will not allow meat from another country to be marketed in the United States, it is
imposing a(n)
a. quota.
b. devaluation.
c. tariff.
d. duty.
e. embargo.
83. At present, the United States has an embargo against North Korea because
a. North Korean products are too difficult to use.
b. products from North Korea are in higher demand than American-made products.
c. North Korea has an embargo on American products.
d. North Korea will not adopt a capitalist government.
e. the two countries have extremely poor political relations.
84. American automakers are concerned about the availability of so many foreign cars to U.S. consumers and that
their chances to sell their own cars are limited. To directly correct the situation, they encourage Congress to impose
a(n)
a. export quota.
b. export duty.
c. import quota.
d. tariff.
e. import duty.
85. A restriction on the amount of a particular foreign currency that can be purchased or sold is a
a. monetary export control.
b. nontariff barrier.
c. currency devaluation.
d. currency control.
e. foreign-exchange control.
86. When an Indian importing firm wants to import U.S.-made products, it must first secure permission and dollars from
the Reserve Bank of India. This type of restriction is known as a
a. currency devaluation.
b. foreign-exchange control.
c. negative foreign exchange.
d. trade embargo.
e. quota.