1) industrial processes that add weight or bulk to a commodity are likely to be located
near the resource market to minimize transportation costs.
a.true
b.false
2) although the uruguay round of multilateral trade negotiations succeeded in reducing
nontariff trade barriers, it could not achieve reductions in tariff trade barriers.
a.true
b.false
3) according to the escape clause, temporary trade restrictions may be imposed in
industries where domestic producers are substantially being harmed by surging imports.
a.true
b.false
4) the movement to free international trade is most likely to generate short-term
unemployment in which industries?
a.industries in which there are neither imports nor exports
b.import-competing industries
c.industries that sell to domestic and foreign buyers
d.industries that sell to only foreign buyers
5) for a ‘small” country, a tariff raises the domestic price of an imported product by the
full amount of the duty.
a.true
b.false
6) foreign ownership of u.s. financial assets
a.has decreased since the 1960’s
b.has increased since the 1960’s
c.has made the u.s. a net borrower since the late 1980’s
d.both a and c
7) in the short run, mexico would realize overall welfare gains from becoming a
member of the north american free trade agreement if the resulting diseconomies of
scale effect more than offset the competition effect.
a.true
b.false
8) the ricardian theory of comparative advantage could fully explain the distribution of
the gains from trade among trading partners.
a.true
b.false
9) international trade benefits:
a.all workers
b.most workers
c.many workers
d.none of these is correct
10) a nation realizes external balance when its current account is in equilibrium.
a.true
b.false
11) which of the following would call for inpayments to the united states?
a.american imports of german steel
b.gold flowing out of the united states
c.american unilateral transfers to less-developed countries
d.american firms selling insurance to british shipping companies
12) trade creation would occur if canada and the united states form a free-trade area,
and canadians then import less steel from the united states while importing more steel
from japan.
a.true
b.false
13) members of the general agreement on tariffs and trade and its successor, the world
trade organization, agree to the principle of nondiscrimination in trade and the reduction
of trade barriers by multilateral negotiations.
a.true
b.false