Question 1

Which of the following statements about the European Union (EU)  is true?

Accepted Answer

A)  All members of the EU use a common currency (the euro) .
B)  The EU has abolished most trade barriers among participating countries and has common tariffs applied to non-EU goods.
C)  The EU has eliminated most barriers to the trade of goods and services among participating nations but largely restricts the movement of labor and capital.
D)  Trade within the EU is liberalized, but EU nations set most of their own policies with regard to trade with non-EU nations.E) A) and B)
F) B) and C)

Question 2

If a nation's labor can produce more of a good compared to labor in another nation, then we say that the first nation has a comparative advantage in producing that good.

Accepted Answer

A) True 
 B)False

Question 3

(Consider This)  According to Dallas Federal Reserve economist W.Michael Cox, taken to its extreme, the logic of "buying American" implies that

Accepted Answer

A)  we should buy everything from abroad.
B)  people should only consume what they can produce themselves.
C)  consumers should only buy goods from other states.
D)  the best quality goods are found in the United States.E) A) and D)
F) A) and C)

Question 4

The organization created to oversee the provisions of multilateral trade agreements, resolve disputes under the international trade rules, and meet periodically to consider further trade liberalization is called the

Accepted Answer

A)  International Monetary Fund (IMF) .
B)  World Trade Organization (WTO) .
C)  Common Market Organization (CMO) .
D)  International Trade Commission (IT
C)  .E) B) and D)
F) A) and B)

Question 5

Which of the following product groups is a leading export of the United States?

Accepted Answer

A)  home appliances
B)  metals
C)  agricultural products
D)  computersE) A) and B)
F) B) and D)

Question 6

A basic assumption in comparing the production possibilities curves of two nations is that those possibilities curves reflect differences in

Accepted Answer

A)  consumer tastes and preferences.
B)  resource availability and technological capabilities.
C)  the nations' incomes and income distribution.
D)  unemployment and inflation rates.E) A) and B)
F) None of the above

Question 7

A nation will import a particular product if the world price is less than the domestic price.

Accepted Answer

A) True 
 B)False

Question 8

Which country has the largest share of total world exports?

Accepted Answer

A)  Japan
B)  Germany
C)  United States
D)  ChinaE) A) and D)
F) B) and C)

Question 9

In order for mutually beneficial trade to occur between two otherwise isolated nations,

Accepted Answer

A)  each nation must be able to produce at least one good absolutely cheaper than the other.
B)  each nation must be able to produce at least one good relatively cheaper than the other.
C)  each nation must face constant costs in the production of the good it exports.
D)  one nation's production must be labor-intensive, while the other nation's production is capital-intensive.E) A) and D)
F) A) and C)

Question 10

Which of the following statements is false?

Accepted Answer

A)  In recent years, the United States has had large annual trade deficits in goods and services.
B)  The United States imports some of the same categories of goods as it exports.
C)  China has the largest share of world exports.
D)  As a percentage of GDP, U.S.exports are the highest among the industrially advanced nations.E) C) and D)
F) A) and B)

Question 11

Assume that by devoting all its resources to the production of X, nation Alpha can produce 20 units of X.By devoting all its resources to Y, Alpha can produce 30Y.Comparable figures for nation Beta are
60X and 40Y.There is no basis for trade between Alpha and Beta, because Beta has an absolute advantage in the production of both goods.

Accepted Answer

A) True 
 B)False

Question 12

Which organization meets regularly to establish rules and settle disputes related to international trade?

Accepted Answer

A)  the United Nations Commission on Trade Law
B)  the United Nations Conference on Trade and Development
C)  the World Trade Organization
D)  the World Economic ForumE) A) and B)
F) B) and C)

Question 13

The United States' most important trading partner quantitatively is

Accepted Answer

A)  China.
B)  Canada.
C)  Mexico.
D)  Japan.E) B) and C)
F) B) and D)

Question 14

The slopes of the production possibilities curves for two nations reflect the

Accepted Answer

A)  relative prices of the resources in the two nations.
B)  amounts of imports and exports of the two nations.
C)  average income levels in the two nations.
D)  opportunity costs of production in the two nations.E) C) and D)
F) A) and C)

Question 15

A maximum limit set on the amount of a specific good that may be imported into a country over a given period of time is called a

Accepted Answer

A)  tariff.
B)  quota.
C)  nontariff barrier.
D)  voluntary export restriction.E) A) and B)
F) A) and C)

Question 16

Which is an example of a nontariff barrier (NTB) ?

Accepted Answer

A)  an export subsidy
B)  an excise tax on the physical volume of imported goods
C)  box-by-box inspection requirements for imported fruit
D)  an excise tax on the dollar value of imported goodsE) None of the above
F) B) and C)

Question 17

Frederic Bastiat's satire clearly illustrates that

Accepted Answer

A)  French candlemakers would benefit from government restrictions on trade.
B)  French consumers would benefit from a tariff on U.S.candles.
C)  the arguments in favor of trade protectionism can sometimes be ridiculous.
D)  the arguments in favor of protectionism are sometimes well-founded.E) B) and C)
F) None of the above

Question 18

A "Buy American" policy strictly enforced is equivalent to a(n)

Accepted Answer

A)  tariff.
B)  quota.
C)  export subsidy.
D)  voluntary export restriction.E) All of the above
F) A) and C)

Question 19

A nation with abundant capital resources tends to be an exporter of

Accepted Answer

A)  labor-intensive products
B)  capital-intensive products.
C)  natural resource-based products.
D)  consumer products.E) All of the above
F) None of the above

Question 20

Some people accuse an offshoring firm of "exporting jobs".This activity called offshoring is really equivalent to

Accepted Answer

A)  exporting products.
B)  importing products.
C)  import tariffs.
D)  import quotas.E) C) and D)
F) None of the above

Exam 40: International Trade

A nation will import a particular product if the world price is less than the domestic price.

Correct Answer
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The United States' most important trading partner quantitatively is

Correct Answer
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Which of the following statements is false?

Correct Answer
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Correct Answer
verified

A maximum limit set on the amount of a specific good that may be imported into a country over a given period of time is called a

Correct Answer
verified

Some people accuse an offshoring firm of "exporting jobs".This activity called offshoring is really equivalent to

Correct Answer
verified

Frederic Bastiat's satire clearly illustrates that

Correct Answer
verified

In order for mutually beneficial trade to occur between two otherwise isolated nations,

Correct Answer
verified

The slopes of the production possibilities curves for two nations reflect the

Correct Answer
verified

A nation with abundant capital resources tends to be an exporter of

Correct Answer
verified

Which of the following product groups is a leading export of the United States?

Correct Answer
verified

A "Buy American" policy strictly enforced is equivalent to a(n)

Correct Answer
verified

The organization created to oversee the provisions of multilateral trade agreements, resolve disputes under the international trade rules, and meet periodically to consider further trade liberalization is called the

Correct Answer
verified

A basic assumption in comparing the production possibilities curves of two nations is that those possibilities curves reflect differences in

Correct Answer
verified

(Consider This) According to Dallas Federal Reserve economist W.Michael Cox, taken to its extreme, the logic of "buying American" implies that

Correct Answer
verified

Which organization meets regularly to establish rules and settle disputes related to international trade?

Correct Answer
verified

Which country has the largest share of total world exports?

Correct Answer
verified

Which is an example of a nontariff barrier (NTB) ?

Correct Answer
verified

Which of the following statements about the European Union (EU) is true?

Correct Answer
verified

If a nation's labor can produce more of a good compared to labor in another nation, then we say that the first nation has a comparative advantage in producing that good.

Correct Answer
verified

Exam 40: International Trade

A nation will import a particular product if the world price is less than the domestic price.

Correct AnswerverifiedShow Answer

The United States' most important trading partner quantitatively is

Correct AnswerverifiedShow Answer

Which of the following statements is false?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A maximum limit set on the amount of a specific good that may be imported into a country over a given period of time is called a

Correct AnswerverifiedShow Answer

Some people accuse an offshoring firm of "exporting jobs".This activity called offshoring is really equivalent to

Correct AnswerverifiedShow Answer

Frederic Bastiat's satire clearly illustrates that

Correct AnswerverifiedShow Answer

In order for mutually beneficial trade to occur between two otherwise isolated nations,

Correct AnswerverifiedShow Answer

The slopes of the production possibilities curves for two nations reflect the

Correct AnswerverifiedShow Answer

A nation with abundant capital resources tends to be an exporter of

Correct AnswerverifiedShow Answer

Which of the following product groups is a leading export of the United States?

Correct AnswerverifiedShow Answer

A "Buy American" policy strictly enforced is equivalent to a(n)

Correct AnswerverifiedShow Answer

The organization created to oversee the provisions of multilateral trade agreements, resolve disputes under the international trade rules, and meet periodically to consider further trade liberalization is called the

Correct AnswerverifiedShow Answer

A basic assumption in comparing the production possibilities curves of two nations is that those possibilities curves reflect differences in

Correct AnswerverifiedShow Answer

(Consider This) According to Dallas Federal Reserve economist W.Michael Cox, taken to its extreme, the logic of "buying American" implies that

Correct AnswerverifiedShow Answer

Which organization meets regularly to establish rules and settle disputes related to international trade?

Correct AnswerverifiedShow Answer

Which country has the largest share of total world exports?

Correct AnswerverifiedShow Answer

Which is an example of a nontariff barrier (NTB) ?

Correct AnswerverifiedShow Answer

Which of the following statements about the European Union (EU) is true?

Correct AnswerverifiedShow Answer

If a nation's labor can produce more of a good compared to labor in another nation, then we say that the first nation has a comparative advantage in producing that good.

Correct AnswerverifiedShow Answer

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