Question 1

If the U.S.dollar appreciates against the Japanese yen:

Accepted Answer

A) U.S.goods will be cheaper for Japanese consumers. 
B) Japanese goods will be more expensive in the United States. 
C) the U.S.dollar will buy fewer Japanese yen. 
D) Japanese goods will be cheaper in the United States. 
A) U.S.goods will be cheaper for Japanese consumers. 
B) Japanese goods will be more expensive in the United States. 
C) the U.S.dollar will buy fewer Japanese yen. 
D) Japanese goods will be cheaper in the United States.

Question 2

Workers in education, health care and government sectors have:

Accepted Answer

A) seen their incomes fall just like in manufacturing. 
B) been mostly hurt from globalization. 
C) benefited from globalization in terms of lower consumer prices. 
D) been hurt because the sector has been shrinking. 
A) seen their incomes fall just like in manufacturing. 
B) been mostly hurt from globalization. 
C) benefited from globalization in terms of lower consumer prices. 
D) been hurt because the sector has been shrinking.

Question 3

The foreign exchange rate is the rate at which:

Accepted Answer

A) taxes are imposed on foreign imports. 
B) foreign good are traded between domestic consumers. 
C) one country's currency can be traded for another country's currency. 
D) immigrants are exchanged between countries. 
A) taxes are imposed on foreign imports. 
B) foreign good are traded between domestic consumers. 
C) one country's currency can be traded for another country's currency. 
D) immigrants are exchanged between countries.

Question 4

The text mentions 10 sources of U.S.comparative advantage.Which of the following is not one of them?

Accepted Answer

A) Relatively open immigration laws 
B) Religious diversity 
C) Skills of the U.S.labor force 
D) A large stock of intellectual property rights 
A) Relatively open immigration laws 
B) Religious diversity 
C) Skills of the U.S.labor force 
D) A large stock of intellectual property rights

Question 5

When a country runs a trade surplus, it will:

Accepted Answer

A) borrow from foreign countries or sell assets to them. 
B) borrow from foreign countries or buy assets from them. 
C) lend to foreign countries or sell assets to them. 
D) lend to foreign countries or buy assets from them. 
A) borrow from foreign countries or sell assets to them. 
B) borrow from foreign countries or buy assets from them. 
C) lend to foreign countries or sell assets to them. 
D) lend to foreign countries or buy assets from them.

Question 6

Why are the gains from trade often difficult to recognize?

Accepted Answer

A) The United States does not keep accurate records of employment. 
B) The gains are spread out over a wide variety of goods and consumers. 
C) There are no gains from trade. 
D) The gains are in services, which are difficult to measure. 
A) The United States does not keep accurate records of employment. 
B) The gains are spread out over a wide variety of goods and consumers. 
C) There are no gains from trade. 
D) The gains are in services, which are difficult to measure.

Question 7

If the world supply curve is SW1, and the country's exchange rate depreciates,

Accepted Answer

A) the trade surplus will move toward balance. 
B) the trade surplus will become greater. 
C) the trade deficit will move toward balance. 
D) the trade deficit will become greater. 
A) the trade surplus will move toward balance. 
B) the trade surplus will become greater. 
C) the trade deficit will move toward balance. 
D) the trade deficit will become greater.

Question 8

When a country runs a trade deficit, it does so by:

Accepted Answer

A) borrowing from foreign countries or selling assets to them. 
B) borrowing from foreign countries or buying assets from them. 
C) lending to foreign countries or selling assets to them. 
D) lending to foreign countries or buying assets from them. 
A) borrowing from foreign countries or selling assets to them. 
B) borrowing from foreign countries or buying assets from them. 
C) lending to foreign countries or selling assets to them. 
D) lending to foreign countries or buying assets from them.

Question 9

The discovery of a significant new source of oil that can be exported will lead to:

Accepted Answer

A) depreciation of the currency and a loss of comparative advantage in other sectors. 
B) depreciation of the currency and a gain of comparative advantage in other sectors. 
C) appreciation of the currency and a loss of comparative advantage in other sectors. 
D) appreciation of the currency and a gain of comparative advantage in other sectors. 
A) depreciation of the currency and a loss of comparative advantage in other sectors. 
B) depreciation of the currency and a gain of comparative advantage in other sectors. 
C) appreciation of the currency and a loss of comparative advantage in other sectors. 
D) appreciation of the currency and a gain of comparative advantage in other sectors.

Question 10

Refer to the table shown.From this table we can conclude that if the two countries trade with each other, it is most likely that:

Accepted Answer

A) France exports both goods to Germany. 
B) Germany exports both goods to France. 
C) France exports wine to Germany and imports electric generators from Germany. 
D) France exports electric generators to Germany and imports wine from Germany. 
A) France exports both goods to Germany. 
B) Germany exports both goods to France. 
C) France exports wine to Germany and imports electric generators from Germany. 
D) France exports electric generators to Germany and imports wine from Germany.

Question 11

Refer to the graph shown.   If the price of shekels is $0.90, the quantity of shekels supplied is:

Accepted Answer

A) greater than the quantity demanded.This causes the shekel to gain value. 
B) less than the quantity demanded.This causes the shekel to gain value. 
C) greater than the quantity demanded.This causes the shekel to lose value. 
D) less than the quantity demanded.This causes the shekel to lose value. 
A) greater than the quantity demanded.This causes the shekel to gain value. 
B) less than the quantity demanded.This causes the shekel to gain value. 
C) greater than the quantity demanded.This causes the shekel to lose value. 
D) less than the quantity demanded.This causes the shekel to lose value.

Question 12

Country A's cost of widgets is $4.00 and cost of wadgets is $8 .00.Country B's cost of widgets is 8 euros and cost of wadgets is 16 euros.Which of the following would you suggest?

Accepted Answer

A) Country A should specialize in widgets and Country B in wadgets. 
B) Trade of widgets for wadgets would not benefit the countries. 
C) Country A should specialize in wadgets and Country B in widgets. 
D) Both countries should produce an equal amount of each. 
A) Country A should specialize in widgets and Country B in wadgets. 
B) Trade of widgets for wadgets would not benefit the countries. 
C) Country A should specialize in wadgets and Country B in widgets. 
D) Both countries should produce an equal amount of each.

Question 13

How are goods manufactured in other countries creating jobs in the United States?

Accepted Answer

A) People whose jobs were outsourced are now discouraged workers. 
B) U.S.firms are specializing in managing the trade of these goods. 
C) Foreign countries are importing U.S.natural resources. 
D) People who have lost jobs have more time to shop and therefore increase demand for goods. 
A) People whose jobs were outsourced are now discouraged workers. 
B) U.S.firms are specializing in managing the trade of these goods. 
C) Foreign countries are importing U.S.natural resources. 
D) People who have lost jobs have more time to shop and therefore increase demand for goods.

Question 14

Americans buying Japanese cars:

Accepted Answer

A) demand U.S.dollars and supply Japanese yen. 
B) demand U.S.dollars and demand Japanese yen. 
C) supply U.S.dollars and demand Japanese yen. 
D) supply both U.S.dollars and Japanese yen. 
A) demand U.S.dollars and supply Japanese yen. 
B) demand U.S.dollars and demand Japanese yen. 
C) supply U.S.dollars and demand Japanese yen. 
D) supply both U.S.dollars and Japanese yen.

Question 15

People with intellectual property rights are on the low end of the income distribution that is created from globalization.

Accepted Answer

A) True 
 B)False

Question 16

If the United States' price level is below the world price level, all of the following would be successful in raising the world price (supply) level except:

Accepted Answer

A) the dollar appreciating. 
B) the U.S.gaining a comparative advantage. 
C) wages in the U.S.falling. 
D) the value of U.S.assets falling. 
A) the dollar appreciating. 
B) the U.S.gaining a comparative advantage. 
C) wages in the U.S.falling. 
D) the value of U.S.assets falling.

Question 17

The group that benefited the most from international trade has been people who:

Accepted Answer

A) financed international trade. 
B) managed firms. 
C) owners of firms. 
D) No one has benefited. 
A) financed international trade. 
B) managed firms. 
C) owners of firms. 
D) No one has benefited.

Question 18

A common economically unfounded fear held by laypeople is that:

Accepted Answer

A) globalization will result in the United States losing most jobs because wages are so much higher in the United States. 
B) globalization will result in dramatically higher prices because most services will be outsourced. 
C) the United States has a comparative advantage in the production of all goods. 
D) a U.S.trade surplus will result in a dramatically lower dollar. 
A) globalization will result in the United States losing most jobs because wages are so much higher in the United States. 
B) globalization will result in dramatically higher prices because most services will be outsourced. 
C) the United States has a comparative advantage in the production of all goods. 
D) a U.S.trade surplus will result in a dramatically lower dollar.

Question 19

When Ross Perot ran for president as a third party candidate in the 1992 presidential elections, he argued that free trade with Mexico would result in massive job losses in the United States because Mexican wages were so low.Which of the following is the best explanation of why few economists agreed with Perot?

Accepted Answer

A) Economists did not believe that any jobs would be lost in the United States. 
B) Economists believed that the U.S.unemployment rate would rise. 
C) Although economists agreed that in some areas the United States would lose jobs, they expected that the United States would gain jobs in other areas. 
D) Although economists predicted that unemployment would rise, the increased profits of corporations would raise stock prices enough to compensate for the lost jobs. 
A) Economists did not believe that any jobs would be lost in the United States. 
B) Economists believed that the U.S.unemployment rate would rise. 
C) Although economists agreed that in some areas the United States would lose jobs, they expected that the United States would gain jobs in other areas. 
D) Although economists predicted that unemployment would rise, the increased profits of corporations would raise stock prices enough to compensate for the lost jobs.

Question 20

If the world supply curve is SW0, and the country discovers a significant natural resource that can be exported, the world supply curve will shift:

Accepted Answer

A) down and the trade balance will become a deficit. 
B) down and the trade balance will become a surplus. 
C) up and the trade balance will become a deficit. 
D) up and the trade balance will become a surplus. 
A) down and the trade balance will become a deficit. 
B) down and the trade balance will become a surplus. 
C) up and the trade balance will become a deficit. 
D) up and the trade balance will become a surplus.

Exam 9: Comparative Advantage, Exchange Rates, and Globalization

If the U.S.dollar appreciates against the Japanese yen:

Workers in education, health care and government sectors have:

The foreign exchange rate is the rate at which:

The text mentions 10 sources of U.S.comparative advantage.Which of the following is not one of them?

When a country runs a trade surplus, it will:

Why are the gains from trade often difficult to recognize?

If the world supply curve is SW1, and the country's exchange rate depreciates,

When a country runs a trade deficit, it does so by:

The discovery of a significant new source of oil that can be exported will lead to:

Refer to the table shown.From this table we can conclude that if the two countries trade with each other, it is most likely that:

Refer to the graph shown. If the price of shekels is $0.90, the quantity of shekels supplied is:

Country A's cost of widgets is $4.00 and cost of wadgets is $8 .00.Country B's cost of widgets is 8 euros and cost of wadgets is 16 euros.Which of the following would you suggest?

How are goods manufactured in other countries creating jobs in the United States?

Americans buying Japanese cars:

People with intellectual property rights are on the low end of the income distribution that is created from globalization.

If the United States' price level is below the world price level, all of the following would be successful in raising the world price (supply) level except:

The group that benefited the most from international trade has been people who:

A common economically unfounded fear held by laypeople is that:

If the world supply curve is SW0, and the country discovers a significant natural resource that can be exported, the world supply curve will shift:

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

International Trade Policy

Economic Growth, Business Cycles, and Unemployment

Measuring and Describing the Aggregate Economy

The Keynesian Short-Run Policy Model: Demand-Side Policies

The Classical Long-Run Policy Model: Growth and Supply-Side Policies

The Financial Sector and the Economy

Monetary Policy

Financial Crises, Panics, and Unconventional Monetary Policy

Deficits and Debt: the Austerity Debate

The Fiscal Policy Dilemma

Jobs and Unemployment

Inflation, Deflation, and Macro Policy

International Financial Policy

Macro Policy in a Global Setting

Structural Stagnation and Globalization

Macro Policy in Developing Countries

Filters

If the world supply curve is S_W1, and the country's exchange rate depreciates,

If the world supply curve is S_W0, and the country discovers a significant natural resource that can be exported, the world supply curve will shift: