Question 1

Why should the recorded U.S.­Chinese bilateral trade
Deficit in goods be interpreted with some caution?

Accepted Answer

A) U.S.imports of Chinese products may be produced by U.S.subsidiaries that generate profits for the U.S.parent
Firms (recorded as U.S.service export income). 
B) U.S.imports of Chinese products may utilize material inputs that China imports from the United States. 
C) U.S.imports of Chinese products may be produced with capital goods (e.g., machinery) that China imports from
The United States. 
D) All of these are reasons for a cautious interpretation of the U.S.­Chinese bilateral trade balance. 
A) U.S.imports of Chinese products may be produced by U.S.subsidiaries that generate profits for the U.S.parent
Firms (recorded as U.S.service export income). 
B) U.S.imports of Chinese products may utilize material inputs that China imports from the United States. 
C) U.S.imports of Chinese products may be produced with capital goods (e.g., machinery) that China imports from
The United States. 
D) All of these are reasons for a cautious interpretation of the U.S.­Chinese bilateral trade balance. A

Question 2

If a country's GDP is $10 trillion, its exports are $1 trillion,
Its imports are $1.5 trillion, then:

Accepted Answer

A) its trade­to­GDP ratio is 10%. 
B) its trade­to­GDP ratio is 15%. 
C) its trade­to­GDP is 25%. 
D) its trade­to­GDP is 400%. 
A) its trade­to­GDP ratio is 10%. 
B) its trade­to­GDP ratio is 15%. 
C) its trade­to­GDP is 25%. 
D) its trade­to­GDP is 400%. C

Question 3

What was the short­lived import tariff enacted in 1930 that
Raised rates to an average of 60% on many imports?

Accepted Answer

A) Reaganomics principle 
B) Smoot­Hawley tariff 
C) Blair­Bush tariff 
D) International equity tariff 
A) Reaganomics principle 
B) Smoot­Hawley tariff 
C) Blair­Bush tariff 
D) International equity tariff B

Question 4

If we measure the ratio of total trade to GDP, which of the
Following nations had the lowest ratio in 2008?

Accepted Answer

A) Hong Kong (China) 
B) Japan 
C) Germany 
D) the United States 
A) Hong Kong (China) 
B) Japan 
C) Germany 
D) the United States

Question 5

Until recently, labor could freely move from one country
to another within the EU.However, most EU countries
now place restrictions on migrants from new EU
members.Why have these countries done so?

Accepted Answer

The major reason is

Question 6

Which of the following is NOT a reason for firms in an
Industrial nation to undertake vertical FDI in a low­income
Nation?

Accepted Answer

A) access to raw materials 
B) lower wages 
C) avoidance of export taxes 
D) access to raw materials, lower wages, avoidance of export taxes 
A) access to raw materials 
B) lower wages 
C) avoidance of export taxes 
D) access to raw materials, lower wages, avoidance of export taxes

Question 7

Which of the following statements explain(s) why Asian
Countries trade with industrialized countries?
I.Workers in Asian countries have low wages.
II.Workers are very productive in some Asian countries.
III.Asian countries have an abundant supply of raw
Materials.

Accepted Answer

A) I 
B) I, II 
C) 1I 
D) I, II, and III 
A) I 
B) I, II 
C) 1I 
D) I, II, and III

Question 8

Which of the following is considered to be an outflow of
Foreign direct investment (FDI) from the United States?

Accepted Answer

A) General Motors sells Saab, its Swedish subsidiary, to a Chinese company. 
B) General Motors uses the proceeds of its sale of Saab to purchase British treasury bonds. 
C) General Motors earns interest on its British treasury bonds, which it then credits to its accounts in the United
States. 
D) General Motors invests $100 million to modernize its U.K.plant that produces Vauxhall automobiles. 
A) General Motors sells Saab, its Swedish subsidiary, to a Chinese company. 
B) General Motors uses the proceeds of its sale of Saab to purchase British treasury bonds. 
C) General Motors earns interest on its British treasury bonds, which it then credits to its accounts in the United
States. 
D) General Motors invests $100 million to modernize its U.K.plant that produces Vauxhall automobiles.

Question 9

A Chinese student pays tuition at a U.S.university.The
Chinese government classifies this transaction as:

Accepted Answer

A) a goods' import. 
B) a service export. 
C) a service import. 
D) a goods' export. 
A) a goods' import. 
B) a service export. 
C) a service import. 
D) a goods' export.

Question 10

An American tourist buys a ticket to an opera in Paris.The
u.S.government classifies this transaction as:

Accepted Answer

A) a goods' import of a French Opera. 
B) a service export. 
C) a service import. 
D) a goods' export. 
A) a goods' import of a French Opera. 
B) a service export. 
C) a service import. 
D) a goods' export.

Question 11

If we measure the ratio of total trade to GDP, which of the
Following nations had the highest ratio in 2010?

Accepted Answer

A) Hong Kong (China) 
B) Japan 
C) Germany 
D) the United States 
A) Hong Kong (China) 
B) Japan 
C) Germany 
D) the United States

Question 12

Most foreign direct investment among industrialized
Countries is:

Accepted Answer

A) vertical FDI. 
B) horizontal FDI. 
C) industrial FDI. 
D) reverse­vertical FDI. 
A) vertical FDI. 
B) horizontal FDI. 
C) industrial FDI. 
D) reverse­vertical FDI.

Question 13

Why do some countries (such as the United States) have
low ratios of international trade (exports + imports) to
GDP?

Accepted Answer

Large countries often have low

Question 14

The Smoot­Hawley Tariff act:

Accepted Answer

A) was passed in response to World War II. 
B) was passed as a reaction to the Great Depression in the United States. 
C) was enacted by Germany. 
D) greatly reduced the barriers to trade. 
A) was passed in response to World War II. 
B) was passed as a reaction to the Great Depression in the United States. 
C) was enacted by Germany. 
D) greatly reduced the barriers to trade.

Question 15

What do economists call factors that influence (reduce) the
Total dollar volume of goods and services sold across
International borders?

Accepted Answer

A) trade factor issues 
B) trade barriers 
C) trade conditions 
D) the ratio of total trade to GDP 
A) trade factor issues 
B) trade barriers 
C) trade conditions 
D) the ratio of total trade to GDP

Question 16

One way to gauge the impact of trade on a nation is to
Measure:

Accepted Answer

A) wage distortions and job loss. 
B) the ratio of total imports and exports expressed as a percent of a nation's GDP. 
C) shipping costs. 
D) rises in national income due to trade. 
A) wage distortions and job loss. 
B) the ratio of total imports and exports expressed as a percent of a nation's GDP. 
C) shipping costs. 
D) rises in national income due to trade.

Question 17

Why isn't the US­Chinese bilateral trade balance a good
indicator of the inequality of imports and exports between
the United States and China?

Accepted Answer

The value of Chinese exports t

Question 18

If the trade­to­GDP ratio is 38% and the GDP is $500
Billion, then what is the overall value of trade?

Accepted Answer

A) $390 billion 
B) 190 billion 
C) $100 billion 
D) Not enough information is provided to answer the question. 
A) $390 billion 
B) 190 billion 
C) $100 billion 
D) Not enough information is provided to answer the question.

Question 19

A tax on imported goods is called:

Accepted Answer

A) a luxury tax. 
B) an excise tax. 
C) an income tax. 
D) a tariff. 
A) a luxury tax. 
B) an excise tax. 
C) an income tax. 
D) a tariff.

Question 20

Is most FDI from high­income to low­income countries?

Accepted Answer

No, in 2010, 85% of

Why should the recorded U.S.Chinese bilateral trade Deficit in goods be interpreted with some caution?

If a country's GDP is $10 trillion, its exports are $1 trillion, Its imports are $1.5 trillion, then:

What was the shortlived import tariff enacted in 1930 that Raised rates to an average of 60% on many imports?

If we measure the ratio of total trade to GDP, which of the Following nations had the lowest ratio in 2008?

Until recently, labor could freely move from one country to another within the EU.However, most EU countries now place restrictions on migrants from new EU members.Why have these countries done so?

Which of the following is NOT a reason for firms in an Industrial nation to undertake vertical FDI in a lowincome Nation?

Which of the following statements explain(s) why Asian Countries trade with industrialized countries? I.Workers in Asian countries have low wages. II.Workers are very productive in some Asian countries. III.Asian countries have an abundant supply of raw Materials.

Which of the following is considered to be an outflow of Foreign direct investment (FDI) from the United States?

A Chinese student pays tuition at a U.S.university.The Chinese government classifies this transaction as:

An American tourist buys a ticket to an opera in Paris.The u.S.government classifies this transaction as:

If we measure the ratio of total trade to GDP, which of the Following nations had the highest ratio in 2010?

Most foreign direct investment among industrialized Countries is:

Why do some countries (such as the United States) have low ratios of international trade (exports + imports) to GDP?

The SmootHawley Tariff act:

What do economists call factors that influence (reduce) the Total dollar volume of goods and services sold across International borders?

One way to gauge the impact of trade on a nation is to Measure:

Why isn't the USChinese bilateral trade balance a good indicator of the inequality of imports and exports between the United States and China?

If the tradetoGDP ratio is 38% and the GDP is $500 Billion, then what is the overall value of trade?

A tax on imported goods is called:

Is most FDI from highincome to lowincome countries?

Trade and Technology: the Ricardian Model

Gains and Losses From Trade in the Specific-Factors Model

Trade and Resources: the Heckscher-Ohlin Model

Movement of Labor and Capital Between Countries

Increasing Returns to Scale and Monopolistic Competition

Import Tariffs and Quotas Under Perfect Competition

Import Tariffs and Quotas Under Imperfect Competition

International Agreements: Trade, Labor, and the Environment

Introduction to Exchange Rates and the Foreign Exchange Market

Exchange Rates I: the Monetary Approach in the Long Run

Filters

Exam 1: The Global Economy

Why should the recorded U.S.­Chinese bilateral trade Deficit in goods be interpreted with some caution?

If a country's GDP is $10 trillion, its exports are $1 trillion, Its imports are $1.5 trillion, then:

What was the short­lived import tariff enacted in 1930 that Raised rates to an average of 60% on many imports?

If we measure the ratio of total trade to GDP, which of the Following nations had the lowest ratio in 2008?

Until recently, labor could freely move from one country to another within the EU.However, most EU countries now place restrictions on migrants from new EU members.Why have these countries done so?

Which of the following is NOT a reason for firms in an Industrial nation to undertake vertical FDI in a low­income Nation?

Which of the following statements explain(s) why Asian Countries trade with industrialized countries? I.Workers in Asian countries have low wages. II.Workers are very productive in some Asian countries. III.Asian countries have an abundant supply of raw Materials.

Which of the following is considered to be an outflow of Foreign direct investment (FDI) from the United States?

A Chinese student pays tuition at a U.S.university.The Chinese government classifies this transaction as:

An American tourist buys a ticket to an opera in Paris.The u.S.government classifies this transaction as:

If we measure the ratio of total trade to GDP, which of the Following nations had the highest ratio in 2010?

Most foreign direct investment among industrialized Countries is:

Why do some countries (such as the United States) have low ratios of international trade (exports + imports) to GDP?

The Smoot­Hawley Tariff act:

What do economists call factors that influence (reduce) the Total dollar volume of goods and services sold across International borders?

One way to gauge the impact of trade on a nation is to Measure:

Why isn't the US­Chinese bilateral trade balance a good indicator of the inequality of imports and exports between the United States and China?

If the trade­to­GDP ratio is 38% and the GDP is $500 Billion, then what is the overall value of trade?

A tax on imported goods is called:

Is most FDI from high­income to low­income countries?

Trade and Technology: the Ricardian Model

Gains and Losses From Trade in the Specific-Factors Model

Trade and Resources: the Heckscher-Ohlin Model

Movement of Labor and Capital Between Countries

Increasing Returns to Scale and Monopolistic Competition

Import Tariffs and Quotas Under Perfect Competition

Import Tariffs and Quotas Under Imperfect Competition

International Agreements: Trade, Labor, and the Environment

Introduction to Exchange Rates and the Foreign Exchange Market

Exchange Rates I: the Monetary Approach in the Long Run

Filters

Why should the recorded U.S.Chinese bilateral trade Deficit in goods be interpreted with some caution?

What was the shortlived import tariff enacted in 1930 that Raised rates to an average of 60% on many imports?

Which of the following is NOT a reason for firms in an Industrial nation to undertake vertical FDI in a lowincome Nation?

The SmootHawley Tariff act:

Why isn't the USChinese bilateral trade balance a good indicator of the inequality of imports and exports between the United States and China?

If the tradetoGDP ratio is 38% and the GDP is $500 Billion, then what is the overall value of trade?

Is most FDI from highincome to lowincome countries?