Question 1

What is the average tariff on intra-European Union trade?

Accepted Answer

A)  0% 
B)  10% 
C)  25% 
D)  100% 
A)  0% 
B)  10% 
C)  25% 
D)  100%

Question 2

Which one of the following factors will contribute to continued growth of trade among countries?

Accepted Answer

A)  Political pressures within industrialized countries to establish higher minimum wages in developing countries. 
B)  Declines in the importance of manufacturing in developing nations. 
C)  Negotiation of more free-trade areas among countries. 
D)  Increases in the average worldwide tariff. 
A)  Political pressures within industrialized countries to establish higher minimum wages in developing countries. 
B)  Declines in the importance of manufacturing in developing nations. 
C)  Negotiation of more free-trade areas among countries. 
D)  Increases in the average worldwide tariff.

Question 3

What is reverse-vertical FDI?

Accepted Answer

Reverse-vertical Foreign Direct Investme

Question 4

The Smoot-Hawley 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 5

According to the article "A Sea Change in Shipping 50 Years Ago," what impact did container shipping have on global trade?

Accepted Answer

A)  It increased the time taken to ship commodities. 
B)  It decreased the volume of trade. 
C)  It reduced the time that ships delivering goods spent at the port. 
D)  It increased tariffs between countries. 
A)  It increased the time taken to ship commodities. 
B)  It decreased the volume of trade. 
C)  It reduced the time that ships delivering goods spent at the port. 
D)  It increased tariffs between countries.

Question 6

What was the short-lived import tariff enacted in 1930 that raised rates to an average of 60% on many imports?

Accepted Answer

A)  the Reaganomics principle 
B)  the Smoot-Hawley tariff 
C)  the Blair-Bush tariff 
D)  the International Equity tariff 
A)  the Reaganomics principle 
B)  the Smoot-Hawley tariff 
C)  the Blair-Bush tariff 
D)  the International Equity tariff

Question 7

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)  China does not record all of its imports from the United States in its trade statistics. 
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)  China does not record all of its imports from the United States in its trade statistics.

Question 8

The greatest amount of FDI is:

Accepted Answer

A)  vertical FDI. 
B)  horizontal FDI. 
C)  third-party FDI. 
D)  between the United States and Mexico. 
A)  vertical FDI. 
B)  horizontal FDI. 
C)  third-party FDI. 
D)  between the United States and Mexico.

Question 9

U.S. and European merchandise trade accounted for approximately what share of total world merchandise (goods) trade in 2014?

Accepted Answer

A)  slightly more than one fourth 
B)  slightly more than one third 
C)  about one half 
D)  slightly more than two thirds 
A)  slightly more than one fourth 
B)  slightly more than one third 
C)  about one half 
D)  slightly more than two thirds

Question 10

What was the 1956 invention that increased the volume of world trade by lowering the cost of shipping?

Accepted Answer

A)  the personal computer 
B)  the bar code 
C)  bubble wrap 
D)  the shipping container 
A)  the personal computer 
B)  the bar code 
C)  bubble wrap 
D)  the shipping container

Question 11

Which of the following countries had the highest ratio of international trade to GDP in 2014?

Accepted Answer

A)  the United States 
B)  Japan 
C)  China 
D)  Malaysia 
A)  the United States 
B)  Japan 
C)  China 
D)  Malaysia

Question 12

Which of the following entries is considered a service export?

Accepted Answer

A)  Japan buys soybeans from the United States. 
B)  China sells iPhones to the United States. 
C)  Mexican tourists visit the Grand Canyon. 
D)  France sells wine to the United States. 
A)  Japan buys soybeans from the United States. 
B)  China sells iPhones to the United States. 
C)  Mexican tourists visit the Grand Canyon. 
D)  France sells wine to the United States.

Question 13

Suppose that in retaliation to British limits on Balkan migrants, Bulgaria carries out its threat to take "reciprocal measures" against British migrants to Bulgaria. Will this work? Why or why not?

Accepted Answer

Whether the reciprocal measures taken by

Question 14

Which of the following is NOT a reason for firms in an industrial nation to undertake vertical FDI in a low-income nation?

Accepted Answer

A)  access to raw materials in the low-income nation 
B)  lower wages in the low-income nation 
C)  avoidance of export taxes in the low-income nation 
D)  avoidance of import taxes in the low-income nation 
A)  access to raw materials in the low-income nation 
B)  lower wages in the low-income nation 
C)  avoidance of export taxes in the low-income nation 
D)  avoidance of import taxes in the low-income nation

Question 15

During the 2008-09 financial crisis, what happened to the ratios of trade to GDP for most developed nations?

Accepted Answer

A)  They rose. 
B)  They fell. 
C)  They did not change. 
D)  We do not have enough data yet to say what happened. 
A)  They rose. 
B)  They fell. 
C)  They did not change. 
D)  We do not have enough data yet to say what happened.

Question 16

Immigration issues are usually more intense in:

Accepted Answer

A)  nations where wages are lower than world averages. 
B)  nations with unsecured borders. 
C)  nations with open-door policies. 
D)  nations where wages are higher than world averages. 
A)  nations where wages are lower than world averages. 
B)  nations with unsecured borders. 
C)  nations with open-door policies. 
D)  nations where wages are higher than world averages.

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

Most FDI flows are owned by:

Accepted Answer

A)  low-income nations. 
B)  Australia. 
C)  OECD nations. 
D)  the African continent. 
A)  low-income nations. 
B)  Australia. 
C)  OECD nations. 
D)  the African continent.

Question 19

If a country's trade-to-GDP ratio is 38% and the GDP is $500 billion, then what is the overall value of its trade (imports plus exports)?

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 20

With which country 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

Exam 1: Trade in the Global Economy

What is the average tariff on intra-European Union trade?

Which one of the following factors will contribute to continued growth of trade among countries?

What is reverse-vertical FDI?

The Smoot-Hawley Tariff Act:

According to the article "A Sea Change in Shipping 50 Years Ago," what impact did container shipping have on global trade?

What was the short-lived import tariff enacted in 1930 that raised rates to an average of 60% on many imports?

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

The greatest amount of FDI is:

U.S. and European merchandise trade accounted for approximately what share of total world merchandise (goods) trade in 2014?

What was the 1956 invention that increased the volume of world trade by lowering the cost of shipping?

Which of the following countries had the highest ratio of international trade to GDP in 2014?

Which of the following entries is considered a service export?

Suppose that in retaliation to British limits on Balkan migrants, Bulgaria carries out its threat to take "reciprocal measures" against British migrants to Bulgaria. Will this work? Why or why not?

Which of the following is NOT a reason for firms in an industrial nation to undertake vertical FDI in a low-income nation?

During the 2008-09 financial crisis, what happened to the ratios of trade to GDP for most developed nations?

Immigration issues are usually more intense in:

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

Most FDI flows are owned by:

If a country's trade-to-GDP ratio is 38% and the GDP is $500 billion, then what is the overall value of its trade (imports plus exports)?

With which country or region does most U.S. foreign direct investment occur?

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

Offshoring of Goods and Services

Import Tariffs and Quotas Under Perfect Competition

Import Tariffs and Quotas Under Imperfect Competition

Export Subsidies in Agriculture and High-Technology Industries

International Agreements: Trade, Labor, and the Environment

The Global Macroeconomy

Introduction to Exchange Rates and the Foreign Exchange Market

Exchange Rates I: the Monetary Approach in the Long Run

Exchange Rates II: the Asset Approach in the Short Run

National and International Accounts: Income, Wealth, and the Balance of Payments

Balance of Payments I: the Gains From Financial Globalization

Balance of Payments II: Output, Exchange Rates, and Macroeconomic Policies in the Short Run

Fixed Versus Floating: International Monetary Experience

Exchange Rate Crises: How Pegs Work and How They Break

The Euro

Topics in International Macroeconomics

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