1) american labor unions have recently maintained that u.s. multinational enterprises
have been:
a.exporting american jobs by investing overseas
b.exporting american jobs by keeping investment in the united states
c.importing cheap foreign workers by shifting u.s. investment overseas
d.importing cheap foreign workers by keeping u.s. investment at home
2) local content laws are consistent with the principle of import substitution, in which
domestic production replaces the importation of goods from abroad.
a.true
b.false
3) trade between two nations would not be possible if they have:
a.identical community indifference curves but different production possibilities curves
b.identical production possibilities curves but different community indifference curves
c.different production possibilities curves and different community indifference curves
d.identical production possibilities curves and identical community indifference curves
4) the redistribution effect of an import tariff is the transfer of income from the
domestic:
a.producers to domestic buyers of the good
b.buyers to domestic producers of the good
c.buyers to the domestic government
d.government to the domestic buyers
5) a market-determined increase in the dollar price of the pound is associated with:
a.revaluation of the dollar
b.devaluation of the dollar
c.appreciation of the dollar
d.depreciation of the dollar
6) in 1995 the general agreement on tariffs and trade was replaced by the ____.
a.agency for international development
b.organization for economic cooperation and development
c.united nations center for trade and development
d.world trade organization
7) exhibit 16.1
at the plaza accord of 1985, the group-of-five nations agreed to drive the value of the
dollar downward (i.e., depreciation) so as to help reduce the u.s. trade deficit. answer
the following question(s) on the basis of this information.
refer to exhibit 16.1. the federal reserve might refuse to support the accord on the
grounds that when helping to drive the dollar’s exchange value downward, it promotes
an increase in the u.s.:
a.rate of inflation
b.budget deficit
c.unemployment level
d.economic growth rate
8) under the normal-trade-relations (most-favored-nation) principle, two nations agree
to apply tariffs to each other at rates as low as those applied to any other nation.
a.true
b.false
9) if the united states and canada abolish all tariffs on each other’s goods and implement
a common tariff on goods imported from other countries, there occurs a (an):
a.free-trade area
b.customs union
c.common market
d.economic union
10) exhibit 13.1
assume the marginal propensity to consume for u.s. households equals 0.9, and the
marginal propensity to import for the united states equals 0.1. suppose there occurs an
increase in investment of $10 billion at each level of income.
refer to exhibit 13.1. the change in the level of u.s. imports resulting from the rise in u.s.
income equals:
a.$5 billion
b.$10 billion
c.$15 billion
d.$20 billion
11) export quotas, placed on japanese auto shipments to the united states in the 1980s,
led to rising prices of both japanese autos and u.s.-produced autos purchased by the u.s.
consumer.
a.true
b.false
12) free traders point out that:
a.there is usually an efficiency gain from having tariffs
b.there is usually an efficiency loss from having tariffs
c.producers lose from tariffs at the expense of consumers
d.producers lose from tariffs at the expense of the government
13) the burden of a current account deficit would be the least if a nation uses what it
borrows to finance:
a.unemployment compensation benefits
b.social security benefits
c.expenditures on food and recreation
d.investment on plant and equipment
14) the commodity credit corporation makes available export credit financing for u.s.
agricultural exports.
a.true
b.false