Exam 14: Macroeconomics and International Trade

A bilateral trade imbalance is a serious economic problem.

The sum of the current and financial accounts is always zero.

Which of the following statements is correct?

Scenario: The table below shows the payments received from foreigners by the residents of Country Y and the payments made to foreigners by the residents of Country Y during a certain year. -Refer to the scenario above.Which of the following is likely to be true in this case?

Why do current account deficits always match financial account inflows?

Once engaged in international trade,Asgard decides to specialize in producing armor,according to its comparative advantage.What can we conclude about what happens next?

A U.S.citizen buys a factory in London.This is an example of a(n)________.

The number of computers produced per day in Domium is 1,000 more than the number of computers produced in Chromium.Domium and Chromium have the same number of workers and the same opportunity costs for producing computers.Which of the following statements is true in this case?

Elena is a Greek citizen who is currently studying music in the United States.In the official international trade accounts,she is considered a ________.

Which of the following is a reason IBM decided to provide consulting services rather than manufacture machines?

The table below shows the quantities of rice and wheat that two countries can produce in a year if they specialize in the production of each good. -Refer to the table above.Which of the following is true in this case?

The United States has a large trade deficit with China.How will a ban on trade with China affect the U.S.current account?

Newland's net exports for a certain year equal −$2.2 billion,net factor payments from abroad equal $1.3 billion,and net transfers from abroad equal $0.5 billion.What will be the balance in Newland's financial account for the year?

Which of the following results in a surplus of the U.S.financial account,everything else equal?

Which of the following statements is true of international trade?

Corinthia and Berylia both produce 5 million watches in a year.The opportunity cost of producing one watch is 2 shirts in Corinthia,while the opportunity cost of producing one watch is 3 shirts in Berylia.Which of the following statements is true in this case?

The gains from comparative advantage cannot be realized without trade.

In most countries,trade constitutes a significant share of the country's GDP.Briefly explain what the trend of imports in the United States has been,starting with the 1950s.

The government of Country X is planning to impose a tariff on the import of sports bikes.How is this policy likely to affect the domestic market for sports bikes in Country X?

Scenario: Montesia is predominantly a producer and exporter of manufactured goods. However, it imports several agricultural products. -Refer to the scenario above.Recently,the government of Montesia provided an export subsidy for some cash crops.Which of the following is likely to occur in this case?