Deck 24: Influences on Aggregate Demand: International Trade, Globalization, and Exchange Rates

Question 1

A country has a comparative advantage in production of a product if:

A) It has a lower revenue.
B) It has a higher revenue.
C) It has a lower opportunity cost.
D) It produces less.

Answer 1

C

Question 2

What do the terms of trade measure?

A) The volume of exports compared to the volume of imports.
B) Export prices compared to import prices.
C) The value of your currency against other currencies.
D) The government regulations to allow trade in a country.

Answer 2

B

Question 3

Common arguments against globalization include:

A) Greater inequality
B) Boost world economic growth
C) Shares technology
D) Greater access for consumers to wider range of products

Answer 3

A

Question 4

Which of the following is not a reason why globalization has increased?

A) Better communications
B) Better ICT
C) More protectionism
D) Developments in transportation

Question 5

Free trade is based on:

A) Comparative advantage
B) Comparative disadvantage
C) Absolution
D) Absolute advantage

Question 6

When does free trade occur?

A) It occurs when there are no transportation costs.
B) It occurs when a government pays for the imports.
C) It occurs when there are barriers to entry.
D) It occurs when there are no barriers to trade.

Question 7

The World Trade Organization aims to make all barriers to trade equal.

Question 8

In a customs union this occurs: member states have free trade between each other and a common external tariff with non-member countries

Question 9

The exchange rate is the value of one ___________ in terms of another

Question 10

Depreciation occurs when the value of a currency rises..

Question 11

Which of the following influences the level of exports from a country?

A) The level of income abroad
B) Customer preferences
C) The exchange rate
D) All of the above

Question 12

PPP stands for Purchasing ______________ _____________

Question 13

The single European currency is known as the _________