Question 1

Which of the following is a reason why firms engage in
Vertical FDI?

Accepted Answer

A) Firms want to engage in automated production techniques. 
B) Firms anticipate higher technology and access to capital. 
C) Legal structure, education, highways, and communications technology are usually better in lower­
Income nations. 
D) None of these explains why firms engage in vertical FDI. 
A) Firms want to engage in automated production techniques. 
B) Firms anticipate higher technology and access to capital. 
C) Legal structure, education, highways, and communications technology are usually better in lower­
Income nations. 
D) None of these explains why firms engage in vertical FDI.

Question 2

What is the principal reason for Intel (a U.S.computer chip
Producer) to establish a computer chip manufacturing
Plant in a developing country (e.g., Malaysia)?

Accepted Answer

A) to take advantage of low wages in Malaysia 
B) to take advantage of Malaysia's climate 
C) to take advantage of Malaysia's low tariffs on imported computer chips 
D) All of these are reasons for Intel to establish a computer chip manufacturing plant in Malaysia. 
A) to take advantage of low wages in Malaysia 
B) to take advantage of Malaysia's climate 
C) to take advantage of Malaysia's low tariffs on imported computer chips 
D) All of these are reasons for Intel to establish a computer chip manufacturing plant in Malaysia.

Question 3

Which of the following countries was an original member of
The European Union when it was established in 1952?

Accepted Answer

A) Poland 
B) Greece 
C) the United Kingdom 
D) Italy 
A) Poland 
B) Greece 
C) the United Kingdom 
D) Italy

Question 4

The difference between the total value of a country's
Exports and the total value of its imports is defined as the
Country's:

Accepted Answer

A) trade status. 
B) trade balance. 
C) trade deficit. 
D) bilateral trade balance. 
A) trade status. 
B) trade balance. 
C) trade deficit. 
D) bilateral trade balance.

Question 5

A bilateral trade balance is:

Accepted Answer

A) half the trade deficit. 
B) the measure of imports only-not exports. 
C) the difference between the value of imports and exports between two trading nations. 
D) the sum of the value of imports and exports traded between two nations. 
A) half the trade deficit. 
B) the measure of imports only-not exports. 
C) the difference between the value of imports and exports between two trading nations. 
D) the sum of the value of imports and exports traded between two nations.

Question 6

By 2010, the average worldwide tariff had fallen to about:

Accepted Answer

A) 35%. 
B) 25%. 
C) 15%. 
D) 5%. 
A) 35%. 
B) 25%. 
C) 15%. 
D) 5%.

Question 7

NAFTA is:

Accepted Answer

A) a free trade area among Mexico, Canada, and the United States. 
B) a trade agreement to limit environmentally dangerous imports and exports. 
C) a law preventing illegal immigration. 
D) another name for the European Union. 
A) a free trade area among Mexico, Canada, and the United States. 
B) a trade agreement to limit environmentally dangerous imports and exports. 
C) a law preventing illegal immigration. 
D) another name for the European Union.

Question 8

Which of the following is a trade flow?

Accepted Answer

A) Robert Feenstra purchases $100 million of British treasury bonds. 
B) Robert Feenstra purchases a yogurt factory in France. 
C) Neither of Robert Feenstra's purchases is considered a trade flow. 
D) Both of Robert Feenstra's purchases are considered trade flows. 
A) Robert Feenstra purchases $100 million of British treasury bonds. 
B) Robert Feenstra purchases a yogurt factory in France. 
C) Neither of Robert Feenstra's purchases is considered a trade flow. 
D) Both of Robert Feenstra's purchases are considered trade flows.

Question 9

How has China explained its growing bilateral imbalance
With the United States?

Accepted Answer

A) Current accounting practices make it very difficult to determine the value added and true national origin of
Goods. 
B) If the United States would only improve its efficiency, there would be no gap. 
C) Most Chinese imports are cheap consumer goods, and no firm in the United States wants to make those things
Anyway. 
D) China continues to struggle with corrupt officials at the customs bureau. 
A) Current accounting practices make it very difficult to determine the value added and true national origin of
Goods. 
B) If the United States would only improve its efficiency, there would be no gap. 
C) Most Chinese imports are cheap consumer goods, and no firm in the United States wants to make those things
Anyway. 
D) China continues to struggle with corrupt officials at the customs bureau.

Question 10

A Chinese student pays tuition to a U.S.university.How
is this transaction entered in Chinese and U.S.trade
data?

Accepted Answer

It is entered as a service imp

Question 11

Whenever the value of a nation's exports is less than the
Value of its imports, the nation has:

Accepted Answer

A) a trade deficit. 
B) a trade surplus. 
C) balanced trade. 
D) a trade balance. 
A) a trade deficit. 
B) a trade surplus. 
C) balanced trade. 
D) a trade balance.

Question 12

Europe and the United States accounted for ______ of
World exports in 2010.

Accepted Answer

A) 20% 
B) 15% 
C) 80% 
D) 51% 
A) 20% 
B) 15% 
C) 80% 
D) 51%

Question 13

With which county or region does most U.S.foreign direct
Investment occur?

Accepted Answer

A) China 
B) Japan 
C) Europe 
D) Latin America 
A) China 
B) Japan 
C) Europe 
D) Latin America

Question 14

Africa's share of world exports was _________ in 2010.

Accepted Answer

A) 2% 
B) 12% 
C) 1.5% 
D) 58% 
A) 2% 
B) 12% 
C) 1.5% 
D) 58%

Question 15

The "first golden age" of trade was:

Accepted Answer

A) the period from 1890 to 1913, when tariffs were increased between countries. 
B) the period from 1890 to 1913, when steamships and railroads increased trade. 
C) the period between 1919 and 1935. 
D) the inter­war period. 
A) the period from 1890 to 1913, when tariffs were increased between countries. 
B) the period from 1890 to 1913, when steamships and railroads increased trade. 
C) the period between 1919 and 1935. 
D) the inter­war period.

Question 16

Which of the following ratios is used to measure a
Country's openness to international trade?

Accepted Answer

A) the ratio of its exports to its GDP 
B) the ratio of its imports to its GDP 
C) the ratio of its trade balance (exports minus imports) to its GDP 
D) the ratio of its exports plus imports to its GDP 
A) the ratio of its exports to its GDP 
B) the ratio of its imports to its GDP 
C) the ratio of its trade balance (exports minus imports) to its GDP 
D) the ratio of its exports plus imports to its GDP

Question 17

Whenever the value of a nation's exports equals the value
Of its imports, the nation is experiencing:

Accepted Answer

A) a trade deficit. 
B) a trade surplus. 
C) balanced trade. 
D) a trade balance. 
A) a trade deficit. 
B) a trade surplus. 
C) balanced trade. 
D) a trade balance.

Question 18

__________ foreign direct investment occurs when a firm
From an industrial country owns a plant in a developing
Country.

Accepted Answer

A) Vertical 
B) Horizontal 
C) Industrial 
D) Reverse­vertical 
A) Vertical 
B) Horizontal 
C) Industrial 
D) Reverse­vertical

Question 19

Recent bilateral trade figures alarm politicians who worry
About China's growing trade imbalance with the United
States.What do the authors of your textbook say?

Accepted Answer

A) The real figures are even more shocking. 
B) It is not as bad as the numbers appear because China imports a large percentage of the value of its exports to
The United States from its other trading partners. 
C) It depends on how you count imports and exports and on which currency is used. 
D) Irresponsible governments, corruption, and greedy corporations are responsible for the widening gap. 
A) The real figures are even more shocking. 
B) It is not as bad as the numbers appear because China imports a large percentage of the value of its exports to
The United States from its other trading partners. 
C) It depends on how you count imports and exports and on which currency is used. 
D) Irresponsible governments, corruption, and greedy corporations are responsible for the widening gap.

Question 20

What does a country's gross domestic product (GDP)
Measure?

Accepted Answer

A) the value of all intermediate goods produced in a year 
B) the value of all exports produced in a year 
C) the value of all final goods produced in a year 
D) the value of all production in a year 
A) the value of all intermediate goods produced in a year 
B) the value of all exports produced in a year 
C) the value of all final goods produced in a year 
D) the value of all production in a year

Which of the following is a reason why firms engage in Vertical FDI?

What is the principal reason for Intel (a U.S.computer chip Producer) to establish a computer chip manufacturing Plant in a developing country (e.g., Malaysia)?

Which of the following countries was an original member of The European Union when it was established in 1952?

The difference between the total value of a country's Exports and the total value of its imports is defined as the Country's:

A bilateral trade balance is:

By 2010, the average worldwide tariff had fallen to about:

NAFTA is:

Which of the following is a trade flow?

How has China explained its growing bilateral imbalance With the United States?

A Chinese student pays tuition to a U.S.university.How is this transaction entered in Chinese and U.S.trade data?

Whenever the value of a nation's exports is less than the Value of its imports, the nation has:

Europe and the United States accounted for ______ of World exports in 2010.

With which county or region does most U.S.foreign direct Investment occur?

Africa's share of world exports was _________ in 2010.

The "first golden age" of trade was:

Which of the following ratios is used to measure a Country's openness to international trade?

Whenever the value of a nation's exports equals the value Of its imports, the nation is experiencing:

__________ foreign direct investment occurs when a firm From an industrial country owns a plant in a developing Country.

Recent bilateral trade figures alarm politicians who worry About China's growing trade imbalance with the United States.What do the authors of your textbook say?

What does a country's gross domestic product (GDP) Measure?

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

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Exam 1: The Global Economy

Which of the following is a reason why firms engage in Vertical FDI?

What is the principal reason for Intel (a U.S.computer chip Producer) to establish a computer chip manufacturing Plant in a developing country (e.g., Malaysia)?

Which of the following countries was an original member of The European Union when it was established in 1952?

The difference between the total value of a country's Exports and the total value of its imports is defined as the Country's:

A bilateral trade balance is:

By 2010, the average worldwide tariff had fallen to about:

NAFTA is:

Which of the following is a trade flow?

How has China explained its growing bilateral imbalance With the United States?

A Chinese student pays tuition to a U.S.university.How is this transaction entered in Chinese and U.S.trade data?

Whenever the value of a nation's exports is less than the Value of its imports, the nation has:

Europe and the United States accounted for ______ of World exports in 2010.

With which county or region does most U.S.foreign direct Investment occur?

Africa's share of world exports was _________ in 2010.

The "first golden age" of trade was:

Which of the following ratios is used to measure a Country's openness to international trade?

Whenever the value of a nation's exports equals the value Of its imports, the nation is experiencing:

__________ foreign direct investment occurs when a firm From an industrial country owns a plant in a developing Country.

Recent bilateral trade figures alarm politicians who worry About China's growing trade imbalance with the United States.What do the authors of your textbook say?

What does a country's gross domestic product (GDP) Measure?

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