1) 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.if the us imposes a quota of 15 bottles of wine,
how much wine will us consumers demand, how much wine will us producers produce
and how much wine will be imported?
a.30 bottles, 20 bottles, 10 bottles
b.40 bottles, 25 bottles, 15 bottles
c.30 bottles, 30 bottles, 0 bottles
d.30 bottles, 15 bottles, 15 bottles
2) a forward discount on mexico’s peso serves as a rough benchmark of the expected
appreciation in the peso’s spot rate.
a.true
b.false
3) a fall in the price of imports or a rise in the price of exports will:
a.improve the terms of trade
b.worsen the terms of trade
c.expand the production possibilities curve
d.contract the production possibilities curve
4) an import tariff reduces the welfare of a ‘small” country by an amount equal to the
redistribution effect plus the revenue effect.
a.true
b.false
5) an antidumping duty levied on imports of foreign-produced steel leads to an increase
in consumer surplus in the home country.
a.true
b.false
6) suppose there occurs an increase in the canadian demand for japanese computers.
this results in:
a.an increase in the demand for yen
b.a decrease in the demand for yen
c.an increase in the supply of yen to canada
d.a decrease in the supply of yen to canada
7) suppose a central bank prevents an appreciation of its currency by intervening in the
foreign exchange market and selling its currency for foreign currency. this causes the
a.domestic money supply to decrease and a decline in aggregate demand
b.domestic money supply to increase and a decline in aggregate demand
c.domestic money supply to decrease and a rise in aggregate demand
d.domestic money supply to increase and a fall in aggregate demand
8) critics of the north american free trade agreement maintained that it would result in
manufacturing firms fleeing mexico’s stringent pollution-control policies and relocating
in the united states and canada.
a.true
b.false
9) the role of ____ is to direct one nation’s savings into another nation’s investments:
a.merchandise trade flows
b.services flows
c.current account flows
d.capital flows
10) in the united states, labor unions have generally resisted efforts to implement
restrictions on the number of foreigners allowed into the country.
a.true
b.false
11) to the extent that a local content requirement forces firms to locate production in a
high-cost nation, product price rises and consumer surplus falls.
a.true
b.false