1) the common agricultural policy of the european union has:
a.increased american farm exports to the eu
b.decreased american farm exports to the eu
c.lowered the price of american farm exports to the eu
d.not affected the price of american farm exports to the eu
2) under a floating exchange-rate system, if american exports decrease and american
imports rise, the value of the dollar will:
a.appreciate
b.depreciate
c.be officially revalued
d.be officially devalued
3) under the generalized system of preferences program, the major industrial countries
agree to temporarily reduce tariffs on designated imports from other industrial
countries.
a.true
b.false
4) the u.s. unilateral-transfers balance has consistently registered surplus in the past two
decades.
a.true
b.false
5) increased foreign competition tends to increase profits of domestic import-competing
companies.
a.true
b.false
6) figure 7.3. world oil market
consider figure 7.3. under competitive conditions, producer profits total:
a.$0
b.$140
c.$200
d.$280
7) assume boeing inc. (of the united states) and airbus industrie (of europe) rival for
monopoly profits in the canadian aircraft market. suppose the two firms face identical
cost and demand conditions, as seen in figure 6.1.
figure 6.1. strategic trade policy: boeing versus airbus
referring to figure 6.1, assume that boeing is the first to enter the canadian market.
without a governmental subsidy, the firm maximizes profits by selling ____ aircraft at a
price of $____, and realizes profits totaling $____.
a.4, $12 million, $16 million
b.4, $16 million, $12 million
c.8, $12 million, $16 million
d.8, $16 million, $12 million
8) a subsidy granted to an import-competing producer imposes a deadweight loss on the
domestic economy equal to the redistribution effect plus consumption effect.
a.true
b.false
9) it is widely recognized that the economic sanctions levied against iraq in 1990 were a
major factor causing iraq to withdraw its military forces from kuwait.
a.true
b.false
10) which exchange-rate system does not require monetary reserves for official
exchange-rate intervention?
a.floating exchange rates
b.pegged exchange rates
c.managed floating exchange rates
d.dual exchange rates
11) concerning exchange-rate determination, market fundamentals include inflation
rates, productivity levels, and speculative opinion about future exchange rates.
a.true
b.false
12) a beggar-thy-neighbor policy is the imposition of:
a.free trade to increase domestic productivity
b.trade barriers to increase domestic demand and employment
c.import tariffs to curb domestic inflation
d.revenue tariffs to make products cheaper for domestic consumers