1) prolonged defense of a price ceiling tends to increase the supply of a commodity held
by a buffer stock manager, thus putting downward pressure on price.
a.true
b.false
2) if a country consistently realizes a current-account surplus in its balance of
payments, it likely will become a “net debtor” in its balance of international
indebtedness.
a.true
b.false
3) modern trade theory contends that the pattern of world trade is governed by
a.differences in supply conditions and demand conditions
b.supply conditions only
c.demand conditions only
d.none of the above
4) in natural-resource oriented industries, such as oil and copper, joint ventures have
often been formed by several companies since the cost of resource-extraction may be
prohibitively large for a particular company.
a.true
b.false
5) under a fixed exchange-rate system and high capital mobility, a contractionary fiscal
policy leads to a:
a.trade-account deficit and a capital-account surplus
b.trade-account deficit and a capital-account deficit
c.trade-account surplus and a capital-account surplus
d.trade-account surplus and a capital-account deficit
6) reversing balance of payments disequilibria may came at the expense of
a.economic relations with our trading partners
b.domestic recession
c.price inflation
d.all of the above
7) the uruguay round of multilateral trade negotiations accomplished all of the
following except:
a.placed primary emphasis on nontariff trade barriers
b.is estimated to yield modest gains in world output and employment
c.achieved cuts in tariffs but not in nontariff trade barriers
d.abolished all barriers to trade in agricultural products
8) for the commodity terms of trade to improve, a country’s import price index must rise
relative to its export price index over a given time period.
a.true
b.false
9) the u.s. dollar has been considered a reserve (key) currency because trading nations
have been willing to hold it as an international reserve asset.
a.true
b.false
10) a person needing foreign exchange immediately would purchase it on the spot
market.
a.true
b.false
11) opening the economy to international trade tends to lessen inflationary pressures at
home.
a.true
b.false
12) according to the factor-price-equalization theory, international trade results in the
relative differences in resource prices between nations being eliminated.
a.true
b.false
13) a specific tariff is expressed as a fixed percentage of the total value of an imported
product.
a.true
b.false