Question 1

What are the essential arguments in favor of free trade?

Accepted Answer

Proponents of an open trading system con...

Question 2

International trade is based on the idea that:

Accepted Answer

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 goodsE) B) and C)
F) A) and C)

Question 3

The first wave of globalization was brought to an end by

Accepted Answer

A)   The Great Depression
B)   The Second World War
C)   The First World War
D)   The Smoot-Hawley ActE) A) and B)
F) A) and C)

Question 4

If a nation has an open economy,it means that the nation:

Accepted Answer

A)   Allows private ownership of capital
B)   Has flexible exchange rates
C)   Has fixed exchange rates
D)   Conducts trade with other countriesE) B) and C)
F) A) and D)

Question 5

Although free trade provides benefits for consumers,it is often argued that import protection should be provided to domestic producers of strategic goods and materials vital to the nation's security.

Accepted Answer

A) True 
 B)False

Question 6

Small countries tend to have higher measures of openness than larger countries because:

Accepted Answer

A)   their productivity is higher
B)   they are more reliant on international trade
C)   they are less reliant on international trade
D)   they are more diverseE) A) and B)
F) B) and C)

Question 7

Open economies have more:

Accepted Answer

A)   competition
B)   firm turnover
C)   new firms entering the market
D)   all of theseE) None of the above
F) A) and B) D

Question 8

Does exposure to competition with the world leader in a particular industry improve a firm's productivity?

Accepted Answer

The McKinsey institute found that higher...

Question 9

Which of the following is a fallacy of international trade?

Accepted Answer

A)   Trade is a zero-sum activity
B)   Exports increase employment in exporting industries
C)   Import restrictions increase employment in import-competing industries
D)   Tariffs and quotas reduce trade volumeE) B) and D)
F) A) and D) A

Question 10

The benefits of international trade accrue in the forms of lower domestic prices,development of more efficient methods and new products,and a greater range of consumption choices.

Accepted Answer

A) True 
 B)False

Question 11

Opening the economy to international trade tends to lessen inflationary pressures at home.

Accepted Answer

A) True 
 B)False

Question 12

In an open trading system,a country will import those commodities that it produces at relatively low cost while exporting commodities that can be produced at relatively high cost.

Accepted Answer

A) True 
 B)False

Question 13

A firm's ____,relative to that of other firms,is generally regarded as the most important determinant of competitiveness.

Accepted Answer

A)   Income level
B)   Tastes and preferences
C)   Governmental regulation
D)   ProductivityE) A) and D)
F) B) and D)

Question 14

Foreign ownership of U.S.financial assets

Accepted Answer

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 cE) C) and D)
F) A) and B)

Question 15

A primary reason why nations conduct international trade is because:

Accepted Answer

A)   Some nations prefer to produce one thing while others produce other things
B)   Resources are not equally distributed among all trading nations
C)   Trade enhances opportunities to accumulate profits
D)   Interest rates are not identical in all trading nationsE) A) and C)
F) All of the above

Question 16

During the last century,the relative importance of international trade for the U.S.has:

Accepted Answer

A)   significantly increased
B)   slightly increased
C)   significantly decreased
D)   slightly decreasedE) A) and B)
F) A) and C)

Question 17

Economists have generally found that economic growth rates have a close relation to:

Accepted Answer

A)   openness to trade
B)   education
C)   communications infrastructure
D)   all of theseE) B) and C)
F) All of the above

Question 18

For a nation to maximize its productivity in a global economy:

Accepted Answer

A)   Only imports are necessary
B)   Only exports are necessary
C)   Both imports and exports are necessary
D)   Neither imports nor exports are necessaryE) None of the above
F) A) and D)

Question 19

What is the most important factor which contributes to competitiveness?

Accepted Answer

Key to the concept o...

Question 20

International trade forces domestic firms to become more competitive in terms of:

Accepted Answer

A)   The introduction of new products
B)   Product design and quality
C)   Product price
D)   All of the aboveE) A) and D)
F) A) and C) D

Exam 1: The International Economy and Globalization

What are the essential arguments in favor of free trade?

Correct AnswerverifiedProponents of an open trading system con...View AnswerShow Answer

International trade is based on the idea that:

Correct AnswerverifiedShow Answer

The first wave of globalization was brought to an end by

Correct AnswerverifiedShow Answer

If a nation has an open economy,it means that the nation:

Correct AnswerverifiedShow Answer

Although free trade provides benefits for consumers,it is often argued that import protection should be provided to domestic producers of strategic goods and materials vital to the nation's security.

Correct AnswerverifiedShow Answer

Small countries tend to have higher measures of openness than larger countries because:

Correct AnswerverifiedShow Answer

Open economies have more:

Correct AnswerverifiedD

Does exposure to competition with the world leader in a particular industry improve a firm's productivity?

Correct AnswerverifiedThe McKinsey institute found that higher...View AnswerShow Answer

Which of the following is a fallacy of international trade?

Correct AnswerverifiedA

The benefits of international trade accrue in the forms of lower domestic prices,development of more efficient methods and new products,and a greater range of consumption choices.

Correct AnswerverifiedShow Answer

Opening the economy to international trade tends to lessen inflationary pressures at home.

Correct AnswerverifiedShow Answer

In an open trading system,a country will import those commodities that it produces at relatively low cost while exporting commodities that can be produced at relatively high cost.

Correct AnswerverifiedShow Answer

A firm's ____,relative to that of other firms,is generally regarded as the most important determinant of competitiveness.

Correct AnswerverifiedShow Answer

Foreign ownership of U.S.financial assets

Correct AnswerverifiedShow Answer

A primary reason why nations conduct international trade is because:

Correct AnswerverifiedShow Answer

During the last century,the relative importance of international trade for the U.S.has:

Correct AnswerverifiedShow Answer

Economists have generally found that economic growth rates have a close relation to:

Correct AnswerverifiedShow Answer

For a nation to maximize its productivity in a global economy:

Correct AnswerverifiedShow Answer

What is the most important factor which contributes to competitiveness?

Correct AnswerverifiedKey to the concept o...View AnswerShow Answer

International trade forces domestic firms to become more competitive in terms of:

Correct AnswerverifiedD

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Proponents of an open trading system con...
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D

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The McKinsey institute found that higher...
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A

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Key to the concept o...
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Correct Answer
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D