1) the largest amount of trade with the united states in recent years has been conducted
by:
a.canada
b.germany
c.chile
d.united kingdom
2) an objective of the dollarization of the mexican economy would be to:
a.shield its economy from hyperinflation, currency depreciation, and capital flight
b.allow the federal reserve to be its lender of last resort
c.ensure that its monetary policy is independent of the federal reserve
d.permit it to benefit from tariffs and subsidies imposed by the u.s. government
3) which international organization stipulates procedures for the settlement of
international trade disputes?
a.world trade organization
b.world bank
c.international monetary fund
d.organization of economic development
4) figure 13.1. u.s. capital and financial account
refer to figure 13.1. the u.s. capital and financial account schedule would shift upward
from ca0 to ca1 if:
a.u.s. political stability improves relative to foreign political stability
b.u.s. interest rates rise relative to foreign interest rates
c.taxes are placed on income earned by u.s. residents from foreign investments
d.restrictions are imposed on international loans granted by foreign banks
5) a nation realizes internal balance if economy achieves full employment and price
stability.
a.true
b.false
6) under a system of floating exchange rates, relatively low productivity and high
inflation rates in the united states result in:
a.an increase in the demand for foreign currency, a decrease in the supply of foreign
currency, and a depreciation in the dollar
b.an increase in the demand for foreign currency, an increase in the supply of foreign
currency, and an appreciation in the dollar
c.a decrease in the demand for foreign currency, a decrease in the supply of foreign
currency, and a depreciation in the dollar
d.a decrease in the demand for foreign currency, an increase in the supply of foreign
currency, and an appreciation in the dollar
7) figure 5.6 domestice supply and demand for wine – us
consider figure 5.6.in the global market for wine, the eu is willing to supply as much
wine as the us demands at $8 per bottle.how much will the us produce and import in
these circumstances?
a.5 bottles, 40 bottles
b.40 bottles, 0 bottles
c.5 bottles, 35 bottles
d.5 bottles, 0 bottles
8) which trade instrument has the european union used to insulate its producers and
consumers of agricultural goods from the impact of changing demand and supply
conditions in the rest of the world?
a.domestic content regulations
b.variable import levies
c.voluntary export quotas
d.orderly marketing agreements
9) figure 6.2 illustrates the calculator market for mexico, assumed to be a small nation
that is unable influence the south korean (world) price. assume the south korean price to
be $60 per calculator.
figure 6.2. effects of an export subsidy
consider figure 6.2. to help its firms further penetrate export markets, suppose the south
korean government provides them a production subsidy of $20 per calculator. with the
subsidy, south korean firms charge a price of $____ and export ____ calculators to
mexico.
a.$40, 8
b.$40, 10
c.$20, 8
d.$20, 10
10) figure 5.4 illustrates the calculator market for venezuela, assumed to be a ‘small”
country that is unable to affect the world price. svenezuela is the domestic supply
schedule and dvenezuela is the domestic demand schedule.
figure 5.4. venezuelan calculator market
consider figure 5.4. assume the venezuelan government grants its manufacturers a
production subsidy of $4 per calculator. after the subsidy is granted, venezuelan imports
total:
a.8 calculators
b.12 calculators
c.16 calculators
d.20 calculators
11) if uganda sets its par value at 400 shillings per sdr and burundi sets its par value at
200 francs per sdr, the official exchange rate is 1 franc = o.5 shillings.
a.true
b.false
12) if it takes $1.5515 to buy 1 pound and $0.6845 to buy 1 franc, it takes 2.27 francs to
buy 1 pound.
a.true
b.false
13) predatory dumping would occur if toyota inc. of japan sells autos to u.s. consumers
at lower prices than to japanese consumers in order to put chrysler inc. out of business.
a.true
b.false
14) the highest stage of economic integration is a monetary union.
a.true
b.false
15) assume that canada initially faces payments equilibrium in its merchandise trade
account as well as in its capital and financial account. now suppose that canadian
interest rates fall to levels below those abroad. for canada, this tends to promote:
a.net financial inflows
b.net financial outflows
c.net merchandise exports
d.net merchandise imports
16) if mexico’s labor productivity rises relative to europe’s labor productivity:
a.the peso tends to depreciate against the euro in the short run
b.the peso tends to appreciate against the euro in the short run
c.the peso tends to depreciate against the euro in the long run
d.the peso tends to appreciate against the euro in the long run