Question 1

-If the economy in the diagram above is open to trade and the world price of oil is $25 per barrel,then this economy will _________ million barrels of oil.

Accepted Answer

A)  export 6 
B)  export 8 
C)  export 10 
D)  import 10 
E)  import 6 
A)  export 6 
B)  export 8 
C)  export 10 
D)  import 10 
E)  import 6 A

Question 2

The two institutions responsible for Canada's international trade policy are the

Accepted Answer

A)  Bank of Canada and the Department of Foreign Affairs and International Trade. 
B)  Canada Revenue Agency and the Department of Foreign Affairs and International Trade. 
C)  Department of Finance and the Department of Foreign Affairs and International Trade. 
D)  Bank of Canada and the Department of Finance. 
E)  Canada Revenue Agency and the Department of FinancE. 
A)  Bank of Canada and the Department of Foreign Affairs and International Trade. 
B)  Canada Revenue Agency and the Department of Foreign Affairs and International Trade. 
C)  Department of Finance and the Department of Foreign Affairs and International Trade. 
D)  Bank of Canada and the Department of Finance. 
E)  Canada Revenue Agency and the Department of FinancE. C

Question 3

________ is responsible for Canada's fiscal policy and ________ is responsible for Canada's monetary policy.

Accepted Answer

A)  The Bank of Canada;the Department of Finance 
B)  The Department of Finance;the Bank of Canada 
C)  The Canada Revenue Agency;the Department of Finance 
D)  The Canada Revenue Agency;the Bank of Canada 
E)  The Bank of Canada;the Canada Revenue Agency 
A)  The Bank of Canada;the Department of Finance 
B)  The Department of Finance;the Bank of Canada 
C)  The Canada Revenue Agency;the Department of Finance 
D)  The Canada Revenue Agency;the Bank of Canada 
E)  The Bank of Canada;the Canada Revenue Agency B

Question 4

If a tariff is placed on a good,the domestic price of the good ________,domestic production of the good ________,and domestic consumption of the good ________.

Accepted Answer

A)  increases;increases;increases 
B)  increases;increases;decreases 
C)  increases;decreases;decreases 
D)  decreases;decreases;decreases 
E)  decreases;increases;increases 
A)  increases;increases;increases 
B)  increases;increases;decreases 
C)  increases;decreases;decreases 
D)  decreases;decreases;decreases 
E)  decreases;increases;increases

Question 5

Starting after World War Two,Canada's share of trade with ________ began to rise dramatically,while its share of trade with ________ began to decline dramatically.

Accepted Answer

A)  France;the United Kingdom 
B)  the United Kingdom;France 
C)  the United States;the United Kingdom 
D)  the United Kingdom;the United States 
E)  China;the United States 
A)  France;the United Kingdom 
B)  the United Kingdom;France 
C)  the United States;the United Kingdom 
D)  the United Kingdom;the United States 
E)  China;the United States

Question 6

In the mid-1940s,the United States and the United Kingdom were of roughly equal importance as trading partners of Canada.Since then,the share of Canadian exports going to the United States has ________ and the share going to the United Kingdom has ________.

Accepted Answer

A)  risen to 100%;fall to zero 
B)  risen to about 80%;fallen to about 20% 
C)  risen to about 80%;fallen to about 3% 
D)  fallen to about 20%;risen to about 80% 
E)  fallen to about 3%;risen to about 80% 
A)  risen to 100%;fall to zero 
B)  risen to about 80%;fallen to about 20% 
C)  risen to about 80%;fallen to about 3% 
D)  fallen to about 20%;risen to about 80% 
E)  fallen to about 3%;risen to about 80%

Question 7

Three particularly noteworthy principles of GATT are

Accepted Answer

A)  environmental sustainability,human rights,and labour standards. 
B)  environmental sustainability,national treatment,and fair competition. 
C)  most-favoured nation treatment,national treatment,and fair competition. 
D)  most-favoured nation treatment,human rights,and labour standards. 
E)  most-favoured nation treatment,human rights,and fair competition. 
A)  environmental sustainability,human rights,and labour standards. 
B)  environmental sustainability,national treatment,and fair competition. 
C)  most-favoured nation treatment,national treatment,and fair competition. 
D)  most-favoured nation treatment,human rights,and labour standards. 
E)  most-favoured nation treatment,human rights,and fair competition.

Question 8

An economic and monetary union is an agreement that involves two or more countries

Accepted Answer

A)  that agree to eliminate tariffs and other trade restrictions on most or all mutual trade of their own goods and services,where each country has different tariffs for imports from non-member countries. 
B)  that not only agree to eliminate tariffs and other trade restrictions on most or all mutual trade but also agree to a common set of trade barriers to imports from non-member countries. 
C)  eliminating trade restrictions on most or all mutual trade,maintaining a common set of trade barriers against imports from non-member countries,and permitting mobility of capital and labour among member countries. 
D)  eliminating trade restrictions on most or all mutual trade,maintaining a common set of trade barriers against imports from non-member countries,permitting mobility of capital and labour among member countries,and adopting a single currency. 
E)  that dissolve their borders to become a single political entity. 
A)  that agree to eliminate tariffs and other trade restrictions on most or all mutual trade of their own goods and services,where each country has different tariffs for imports from non-member countries. 
B)  that not only agree to eliminate tariffs and other trade restrictions on most or all mutual trade but also agree to a common set of trade barriers to imports from non-member countries. 
C)  eliminating trade restrictions on most or all mutual trade,maintaining a common set of trade barriers against imports from non-member countries,and permitting mobility of capital and labour among member countries. 
D)  eliminating trade restrictions on most or all mutual trade,maintaining a common set of trade barriers against imports from non-member countries,permitting mobility of capital and labour among member countries,and adopting a single currency. 
E)  that dissolve their borders to become a single political entity.

Question 9

The major development in Canada's trade pattern in the last several years has been the rise of ________ as a source of imports.

Accepted Answer

A)  the United States 
B)  the United Kingdom 
C)  Mexico 
D)  Brazil 
E)  China 
A)  the United States 
B)  the United Kingdom 
C)  Mexico 
D)  Brazil 
E)  China

Question 10

-If the economy in the diagram above is open to trade and the world price of oil is $20 per barrel,then domestic production of oil equals _________ million barrels and domestic consumption of oil equals ________ million barrels.

Accepted Answer

A)  7;12 
B)  12;12 
C)  12;18 
D)  18;7 
E)  7;18 
A)  7;12 
B)  12;12 
C)  12;18 
D)  18;7 
E)  7;18

Question 11

Why do politicians so often resist free trade and "globalization"?

Accepted Answer

A)  Free trade does not benefit the economy as a whole. 
B)  Specific groups may not benefit from free trade. 
C)  Free trade does not benefit the global economy. 
D)  Free trade usually hurts the consumers. 
E)  Free trade usually leads to overproduction of resources. 
A)  Free trade does not benefit the economy as a whole. 
B)  Specific groups may not benefit from free trade. 
C)  Free trade does not benefit the global economy. 
D)  Free trade usually hurts the consumers. 
E)  Free trade usually leads to overproduction of resources.

Question 12

-Refer to the diagram above,where S and D are the domestic supply and demand for a product.The world price of the product is $6.What would be the difference in the total revenue received by foreign producers after a quota of 20 units is imposed,compared with the total revenue received by foreign producers when a $4 per unit tariff is paid?

Accepted Answer

A)  There would be no difference. 
B)  There would be $80 more revenue with a quota than with a tariff. 
C)  There would be $200 more revenue with a quota than with a tariff. 
D)  There would be $120 more revenue with a tariff than with a quota. 
E)  There would be $220 more revenue with a tariff than with a quota. 
A)  There would be no difference. 
B)  There would be $80 more revenue with a quota than with a tariff. 
C)  There would be $200 more revenue with a quota than with a tariff. 
D)  There would be $120 more revenue with a tariff than with a quota. 
E)  There would be $220 more revenue with a tariff than with a quota.

Question 13

-If the economy in the diagram above is open to trade and the world price of oil is $30 per barrel,then this economy will ________ million barrels of oil.

Accepted Answer

A)  export 6 
B)  export 8 
C)  export 10 
D)  import 10 
E)  import 6 
A)  export 6 
B)  export 8 
C)  export 10 
D)  import 10 
E)  import 6

Question 14

Use the following table to answer the question(s)below for Country Y,which is open to trade.Column 1 shows the price of a product,column 2 shows the domestic quantity demanded domestically (Qd),and column 3 shows the domestic quantity supplied (Qs).
  
-Refer to the above table.At what price will there be imports?

Accepted Answer

A)  $6.00. 
B)  $7.00. 
C)  $8.00. 
D)  $9.00. 
E)  There is no price at which there will be imports. 
A)  $6.00. 
B)  $7.00. 
C)  $8.00. 
D)  $9.00. 
E)  There is no price at which there will be imports.

Question 15

Quotas and tariffs are similar in that they both

Accepted Answer

A)  generate revenue for the government that imposes them. 
B)  increase the prices of goods and services in the domestic market. 
C)  increase the revenues of the firms importing the goods and services. 
D)  harm domestic and foreign producers. 
E)  harm domestic and foreign consumers. 
A)  generate revenue for the government that imposes them. 
B)  increase the prices of goods and services in the domestic market. 
C)  increase the revenues of the firms importing the goods and services. 
D)  harm domestic and foreign producers. 
E)  harm domestic and foreign consumers.

Question 16

A customs union is an agreement that involves two or more countries

Accepted Answer

A)  that agree to eliminate tariffs and other trade restrictions on most or all mutual trade of their own goods and services,where each country has different tariffs for imports from non-member countries. 
B)  that not only agree to eliminate tariffs and other trade restrictions on most or all mutual trade but also agree to a common set of trade barriers to imports from non-member countries. 
C)  eliminating trade restrictions on most or all mutual trade,maintaining a common set of trade barriers against imports from non-member countries,and permitting mobility of capital and labour among member countries. 
D)  eliminating trade restrictions on most or all mutual trade,maintaining a common set of trade barriers against imports from non-member countries,permitting mobility of capital and labour among member countries,and adopting a single currency. 
E)  that dissolve their borders to become a single political entity. 
A)  that agree to eliminate tariffs and other trade restrictions on most or all mutual trade of their own goods and services,where each country has different tariffs for imports from non-member countries. 
B)  that not only agree to eliminate tariffs and other trade restrictions on most or all mutual trade but also agree to a common set of trade barriers to imports from non-member countries. 
C)  eliminating trade restrictions on most or all mutual trade,maintaining a common set of trade barriers against imports from non-member countries,and permitting mobility of capital and labour among member countries. 
D)  eliminating trade restrictions on most or all mutual trade,maintaining a common set of trade barriers against imports from non-member countries,permitting mobility of capital and labour among member countries,and adopting a single currency. 
E)  that dissolve their borders to become a single political entity.

Question 17

The demand for DVD players in a country is given by D = 300 - 0.2P,where P is the price of a DVD player.Supply by domestic producers is given by S = 100 + 0.8P.The world price of a DVD player equals $100 and this economy is open to trade.If a tariff of $50 per unit is placed on DVD player imports,the quantity of DVD players demanded domestically will change from _________ with no tariff to __________ with the tariff.

Accepted Answer

A)  260;270 
B)  260;280 
C)  280;270 
D)  280;260 
E)  270;260 
A)  260;270 
B)  260;280 
C)  280;270 
D)  280;260 
E)  270;260

Question 18

A country that does not trade with other countries is called a(n)_________ economy.

Accepted Answer

A)  structural 
B)  nominal 
C)  centrally planned 
D)  open 
E)  closed 
A)  structural 
B)  nominal 
C)  centrally planned 
D)  open 
E)  closed

Question 19

If the equation for planned aggregate expenditure is given by PAE = 4,000 + 0.6Y and potential output is equal to 10,500,then there is a(n)________ gap equal to ________ units,so if net exports ________ by ________,the economy will return to potential output.

Accepted Answer

A)  expansionary;500;decrease;200 
B)  expansionary;50;decrease;20 
C)  expansionary;6,500;increase;2,600 
D)  recessionary;500;increase;200 
E)  recessionary;50;increase;20 
A)  expansionary;500;decrease;200 
B)  expansionary;50;decrease;20 
C)  expansionary;6,500;increase;2,600 
D)  recessionary;500;increase;200 
E)  recessionary;50;increase;20

Question 20

-Refer to the diagram above,where S and D are the domestic supply and demand curves for a product.The world price of the product is $6.If the market is open to international trade but there is a tariff of $2 per unit imposed,the total revenue generated by the tariff would be

Accepted Answer

A)  $40. 
B)  $60. 
C)  $80. 
D)  $100. 
E)  $120. 
A)  $40. 
B)  $60. 
C)  $80. 
D)  $100. 
E)  $120.

-If the economy in the diagram above is open to trade and the world price of oil is $25 per barrel,then this economy will _________ million barrels of oil.

The two institutions responsible for Canada's international trade policy are the

is responsible for Canada's fiscal policy and is responsible for Canada's monetary policy.

If a tariff is placed on a good,the domestic price of the good ,domestic production of the good ,and domestic consumption of the good .

Starting after World War Two,Canada's share of trade with began to rise dramatically,while its share of trade with began to decline dramatically.

In the mid-1940s,the United States and the United Kingdom were of roughly equal importance as trading partners of Canada.Since then,the share of Canadian exports going to the United States has and the share going to the United Kingdom has .

Three particularly noteworthy principles of GATT are

An economic and monetary union is an agreement that involves two or more countries

The major development in Canada's trade pattern in the last several years has been the rise of ________ as a source of imports.

-If the economy in the diagram above is open to trade and the world price of oil is $20 per barrel,then domestic production of oil equals _ million barrels and domestic consumption of oil equals million barrels.

Why do politicians so often resist free trade and "globalization"?

-If the economy in the diagram above is open to trade and the world price of oil is $30 per barrel,then this economy will ________ million barrels of oil.

Quotas and tariffs are similar in that they both

A customs union is an agreement that involves two or more countries

A country that does not trade with other countries is called a(n)_________ economy.

If the equation for planned aggregate expenditure is given by PAE = 4,000 + 0.6Y and potential output is equal to 10,500,then there is a(n) gap equal to units,so if net exports by ,the economy will return to potential output.

-Refer to the diagram above,where S and D are the domestic supply and demand curves for a product.The world price of the product is $6.If the market is open to international trade but there is a tariff of $2 per unit imposed,the total revenue generated by the tariff would be

Measuring Macroeconomic Performance: Output and Prices

Measuring Macroeconomic Performance: Saving and Wealth

Measuring Macroeconomic Performance: Wages, Employment and the Labour Market

Short-Term Economic Fluctuations

Spending and Output in the Short Run

Fiscal Policy

Money, Prices and the Reserve Bank

The Reserve Bank and the Economy

The Aggregate Demand - Aggregate Supply Model

Macroeconomic Policy

The Economy in the Long Run: an Introduction to Economic Growth

The Production Function Approach to Understanding Growth

Savings, Capital Formation and Comparative Economic Growth

International Trade

The Balance of Payments: Net Exports and International Capital Flows

Filters

Exam 15: Exchange Rates and the Open Economy

-If the economy in the diagram above is open to trade and the world price of oil is $25 per barrel,then this economy will _________ million barrels of oil.

The two institutions responsible for Canada's international trade policy are the

________ is responsible for Canada's fiscal policy and ________ is responsible for Canada's monetary policy.

If a tariff is placed on a good,the domestic price of the good ________,domestic production of the good ________,and domestic consumption of the good ________.

Starting after World War Two,Canada's share of trade with ________ began to rise dramatically,while its share of trade with ________ began to decline dramatically.

In the mid-1940s,the United States and the United Kingdom were of roughly equal importance as trading partners of Canada.Since then,the share of Canadian exports going to the United States has ________ and the share going to the United Kingdom has ________.

Three particularly noteworthy principles of GATT are

An economic and monetary union is an agreement that involves two or more countries

The major development in Canada's trade pattern in the last several years has been the rise of ________ as a source of imports.

-If the economy in the diagram above is open to trade and the world price of oil is $20 per barrel,then domestic production of oil equals _________ million barrels and domestic consumption of oil equals ________ million barrels.

Why do politicians so often resist free trade and "globalization"?

-If the economy in the diagram above is open to trade and the world price of oil is $30 per barrel,then this economy will ________ million barrels of oil.

Quotas and tariffs are similar in that they both

A customs union is an agreement that involves two or more countries

A country that does not trade with other countries is called a(n)_________ economy.

If the equation for planned aggregate expenditure is given by PAE = 4,000 + 0.6Y and potential output is equal to 10,500,then there is a(n)________ gap equal to ________ units,so if net exports ________ by ________,the economy will return to potential output.

-Refer to the diagram above,where S and D are the domestic supply and demand curves for a product.The world price of the product is $6.If the market is open to international trade but there is a tariff of $2 per unit imposed,the total revenue generated by the tariff would be

Measuring Macroeconomic Performance: Output and Prices

Measuring Macroeconomic Performance: Saving and Wealth

Measuring Macroeconomic Performance: Wages, Employment and the Labour Market

Short-Term Economic Fluctuations

Spending and Output in the Short Run

Fiscal Policy

Money, Prices and the Reserve Bank

The Reserve Bank and the Economy

The Aggregate Demand - Aggregate Supply Model

Macroeconomic Policy

The Economy in the Long Run: an Introduction to Economic Growth

The Production Function Approach to Understanding Growth

Savings, Capital Formation and Comparative Economic Growth

International Trade

The Balance of Payments: Net Exports and International Capital Flows

Filters

is responsible for Canada's fiscal policy and is responsible for Canada's monetary policy.

If a tariff is placed on a good,the domestic price of the good ,domestic production of the good ,and domestic consumption of the good .

Starting after World War Two,Canada's share of trade with began to rise dramatically,while its share of trade with began to decline dramatically.

In the mid-1940s,the United States and the United Kingdom were of roughly equal importance as trading partners of Canada.Since then,the share of Canadian exports going to the United States has and the share going to the United Kingdom has .

-If the economy in the diagram above is open to trade and the world price of oil is $20 per barrel,then domestic production of oil equals _ million barrels and domestic consumption of oil equals million barrels.

If the equation for planned aggregate expenditure is given by PAE = 4,000 + 0.6Y and potential output is equal to 10,500,then there is a(n) gap equal to units,so if net exports by ,the economy will return to potential output.