1) the world trade organization was established by the ____ of multilateral trade
negotiations:
a.kennedy round
b.tokyo round
c.uruguay round
d.clinton round
2) following world war ii, the u.s.:
a.became less open
b.negotiated reductions in trade barriers with other countries
c.passed a number of protective tariffs
d.concentrated on armament production
3) for an export quota applied to manufactured goods, foreign exporters tend to capture
only a negligible share of the quota’s revenue effect.
a.true
b.false
4) the factor-endowment theory highlights the relative abundance of a nation’s resources
as the key factor underlying comparative advantage.
a.true
b.false
5) suppose expansionary monetary policy in the united states leads to interest rates
falling to 2 percent while tight monetary policy in switzerland leads to interest rates
rising to 8 percent. with floating exchange rates, the dollar would appreciate against the
franc.
a.true
b.false
6) which of the following suggests that by widening the market’s size, international
trade can permit longer production runs for manufacturers, which leads to increasing
efficiency?
a.economies of scale
b.diseconomies of scale
c.comparative cost theory
d.absolute cost theory
7) in recent years, most foreign direct investment in the united states has come from:
a.western europe
b.central america
c.south america
d.asia
8) under the trade adjustment assistance program, a domestic firm or worker can file for
governmental assistance only if it demonstrates that it suffered economic hardship due
to imports of foreign-subsidized goods.
a.true
b.false
9) according to the strategic-trade-policy hypothesis, a subsidy granted to domestic
exporters may lead to increased export profits which more than offset the cost of the
subsidy to domestic taxpayers.
a.true
b.false
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. income resulting from the additional
investment spending equals
a.$20 billion
b.$30 billion
c.$40 billion
d.$50 billion
11) according to the “rules of the game” of the gold standard era, a country’s central
bank agreed to react to international gold flows so as to:
a.officially devalue a currency during eras of payments surpluses
b.officially revalue a currency during eras of payments deficits
c.offset the automatic-adjustment mechanism (e.g., prices)
d.reinforce the automatic-adjustment mechanism
12) the average tariff rate today on dutiable imports in the united states is
approximately:
a.5 percent of the value of imports
b.15 percent of the value of imports
c.20 percent of the value of imports
d.25 percent of the value of imports
13) which terms-of-trade concept emphasizes a nation’s capacity to import?
a.income terms of trade
b.commodity terms of trade
c.barter terms of trade
d.price terms of trade