Archives: Quiz

1) according to the j-curve effect, currency appreciation: a.decreases a trade surplus b.increases a trade surplus c.decreases a trade surplus before increasing a trade surplus d.increases a trade surplus before decreasing a trade surplus 2) according to the product life […]

1) to protect domestic producers from foreign competition, the u.s. government levies both import tariffs and export tariffs. a.true b.false 2) according to the fast-track provision of u.s. trade law, once the president has completed trade negotiations, their outcome is […]

1) suppose that a swiss watch that costs 400 francs in switzerland costs $200 in the united states. the exchange rate between the franc and the dollar is: a.2 francs per dollar b.1 franc per dollar c.$2 per franc d.$3 […]

1) which of the following assets was (were) created in 1970 to provide additional international liquidity, in the belief that increasing world trade requires more liquidity for larger expected payments imbalances? a.eurodollar market b.special drawing rights c.reciprocal currency arrangements d.general […]

1) assume the united states is a large consumer of steel that is able to influence the world price. its demand and supply schedules are respectively denoted by du.s. and su.s. in figure 4.2. the overall (united states plus world) […]

1) according to u.s. trade law, the escape clause provides relief to u.s. firms due to unfair foreign competition. a.true b.false 2) suppose the united states levies an interest equalization tax, which taxes americans on dividend and interest income from […]

1) if i purchase a stereo from south korea, i obtain the stereo and south korea obtains the dollars. but if i purchase a stereo produced in the united states, i obtain the stereo and the dollars remain in america. […]

1) if the u.s. government pursued a “knowledge-based growth policy,” it would subsidize particular firms to help them compete in the world economy. a.true b.false 2) according to staffan linder, trade between two countries tends to be most pronounced when […]

1) a debt buyback is a debt-reduction technique in which a government of a debtor nation buys loans from commercial banks at a discount. a.true b.false 2) figure 9.1 illustrates the market conditions facing sony company and american company initially […]

1) figure 13.3. u.s. capital and financial account under a fixed exchange rate system refer to figure 13.3. decreases in u.s. interest rates relative to foreign interest rates would shift u.s. capital and financial account schedule ca0 downward toward ca1, […]

1) the opec nations during the 1970s manifested their market power by utilizing: a.export tariffs levied for revenue purposes b.export tariffs levied for protective purposes c.import tariffs levied for protective purposes d.import tariffs levied for revenue purposes 2) long-run determinants […]

1) a decrease in the import tariff will result in: a.an increase in imports but a decrease in domestic production b.a decrease in imports but an increase in domestic production c.an increase in price but a decrease in quantity purchased […]

1) assume the united states is a large consumer of steel that is able to influence the world price. its demand and supply schedules are respectively denoted by du.s. and su.s. in figure 4.2. the overall (united states plus world) […]

1) by the 1990s, china had departed from a capitalistic economy and shifted to a soviet-type economy encompassing small-scale, labor-intensive industry. a.true b.false 2) which of the following is not a major factor that encourages developing nations to form international […]

1) the united states was less open to international trade between: a.1890 and 1910 b.1930 and 1950 c.1890 and 1950 d.1950 and 2013 2) in response to the international debt problem, the united states set up a special fund in […]

1) american labor unions have recently maintained that u.s. multinational enterprises have been: a.exporting american jobs by investing overseas b.exporting american jobs by keeping investment in the united states c.importing cheap foreign workers by shifting u.s. investment overseas d.importing cheap […]

1) assume that the united states imports chemicals from germany. trade theory predicts that if the german government grants an export subsidy to its chemical firms, the overall welfare of the united states will increase. a.true b.false 2) referring to […]

1) the general agreement on tariffs and trade was founded in 1995 as a successor to the world trade organization. a.true b.false 2) given an initial equilibrium in the money market and foreign exchange market, suppose the federal reserve increases […]

1) figure 13.4. canadian economy under a fixed exchange rate system refer to figure 13.4. starting at equilibrium income $100 billion, where (s – i)0 intersects (x – m)0, an autonomous decrease in canadian exports of $10 billion leads to […]

1) 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 2) on the u.s. balance-of-payments statement, the following […]

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 […]

1) suppose that the tariff on imported steel is 40 percent, the tariff on imported iron ore is 20 percent, and 30 percent of the cost of producing a ton of steel consists of the iron ore it contains. the […]

1) an increase in import restrictions by the u.s. government tends to promote a merchandise-trade surplus. a.true b.false 2) following world war ii, the u.s.: a.became less open b.negotiated reductions in trade barriers with other countries c.passed a number of […]

1) producing goods for export produces: a.jobs b.income c.tariffs d.a and b 2) suppose that steel from japan faces a 20 percent tariff in france and a 25 percent tariff in italy, while france and italy maintain free trade between […]

1) if a country realizes a current-account deficit in its balance of payments, it becomes a net supplier of funds to the rest of the world. a.true b.false 2) important trading partners of the united states include canada, mexico, japan, […]

1) figure 9.1 illustrates the market conditions facing sony company and american company initially operating as competitors in the domestic ball bearing market. each firm realizes constant long-run costs, mc0=ac0. figure 9.1. international joint venture consider figure 9.1. assume venture […]

1) all of the following are debit items in the balance of payments, except: a.capital outflows b.merchandise exports c.private gifts to foreigners d.foreign aid granted to other nations 2) if a nation has an open economy, it means that the […]

1) concerning international lending risk of commercial banks, ____ refers to the probability that part/all of the interest/principal of a loan will not be repaid. a.country risk b.credit risk c.currency risk d.presidential risk 2) referring to table 2.2, the opportunity […]

1) as an economy opens up to international trade, domestic prices: a.become lower b.become more aligned with international prices c.stabilize d.none of the above; what will happen cannot be predicted 2) the first wave of globalization was brought to an […]

1) international trade is based on the idea that: a.exports should exceed imports b.imports should exceed exports c.resources are more mobile internationally than are goods d.resources are less mobile internationally than are goods 2) a voluntary export agreement a.typically applies […]

1) there is virtually universal agreement among economists that foreign direct investment in the united states has reduced the economic welfare of the average u.s. citizen. a.true b.false 2) appreciation of the dollar’s exchange value worsens the international competitiveness of […]

1) figure 4.4 market for gasoline in a small nation figure 4.4 represents the market for gasoline in a small nation.the free trade world price of gasoline is $3.50.suppose this small nation imposes a tariff on gasoline of $.50 per […]

1) if a tariff and an import quota lead to equivalent increases in the domestic price of steel, then: a.the quota results in efficiency reductions but the tariff does not b.the tariff results in efficiency reductions but the quota does […]

1) which organization of nations permits free trade among its members in industrial goods, while each member maintains freedom in its trade policies toward non-member countries? a.european union b.benelux c.council for mutual economic assistance d.north american free trade association 2) […]

1) concerning industrial policy, the united states has nationalized its major industries in an attempt to promote global champions. a.true b.false 2) a nation that gains from trade will find its consumption point being located: a.inside its production possibilities curve […]

1) the value to american residents of income earned from overseas investments shows up in which account in the u.s. balance of payments? a.current account b.trade account c.unilateral transfers account d.capital account 2) figure 8.1 depicts the supply and demand […]

1) developing countries have sometimes feared open immigration policies of developed countries on the grounds that highly educated and skilled people may emigrate to the developed countries, thus limiting the growth potential of the developing countries. a.true b.false 2) a […]

1) assume the united states is a large consumer of steel that is able to influence the world price. its demand and supply schedules are respectively denoted by du.s. and su.s. in figure 4.2. the overall (united states plus world) […]

1) the figure below illustrates the supply and demand schedules of swiss francs under a system of floating exchange rates. figure 12.2. the market for swiss francs refer to figure 12.2. as the profitability of assets in switzerland rises relative […]

1) most of the world’s population now lives in countries that are: a.integrated into world markets b.becoming integrated into world markets c.near poverty d.a and b 2) small countries tend to have higher measures of openness than larger countries because: […]

1) the demand in the united states for yen will increase if, other things remaining equal: a.labor costs rise in japan b.income rises in japan c.prices rise in japan d.interest rates rise in japan 2) suppose that japan maintains a […]

1) in explaining international trade, the product life cycle theory focuses on a.tastes and preferences b.the role of technological innovation c.per-capita income levels of nations d.both b and c 2) the largest amount of trade with the united states in […]

1) according to the factor-endowment theory, a nation will import that good for which a large amount of the relatively abundant resource is used. a.true b.false 2) assume that general motors employs labor and materials, whose costs are denominated in […]

the imposition of a tariff on imported steel for the home country results in:1) a.improving terms of trade and rising volume of trade b.higher steel prices and falling steel consumption c.lower profits for domestic steel companies d.higher unemployment for domestic […]

1) a main purpose of the international monetary fund is to make loans of foreign currencies to member countries which are experiencing current-account surpluses. a.true b.false 2) referring to table 13.1, if canada’s income rises by $200 billion, imports would […]

1) the uruguay round of trade negotiations lowered: a.trade sanctions levied against south africa b.trade sanctions levied against the soviet union c.tariffs, but not nontariff trade barriers d.tariffs as well as nontariff trade barriers 2) the operations of an mne […]

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 […]

1) copyrights, trademarks, and patents are used to protect the intellectual property of a nation from foreign imitators. a.true b.false 2) world welfare under a customs union a.increases due to a trade creation effect b.decreases due to a trade diversion […]

1) according to ricardian theory, comparative advantage depends on relative differences in labor productivity. a.true b.false 2) in the post-world war ii era, nontariff trade barriers have decreased in importance relative to tariff barriers. a.true b.false Answer: false 3) the […]

1) as a way of helping u.s. business firms trade in the world market on a more equal terms with their organized foreign competitors, the u.s. government permits them to form export trade associations and export trading companies. a.true b.false […]