Deck 14: Macroeconomics and International Trade

Question 1

Scenario: Mark can make three tables and one chair in a day, while John can make four tables and one chair in a day.
Refer to the scenario above.Which of the following is true in this case?

A) John should specialize in making tables, because he has a lower opportunity cost of producing them.
B) John should specialize in making chairs, because he has a lower opportunity cost of producing them.
C) John should specialize in making tables, because he has a greater opportunity cost of producing them.
D) John should specialize in making chairs, because he has a greater opportunity cost of producing them.

Answer 1

John should specialize in making tables, because he has a lower opportunity cost of producing them.

Question 2

Scenario: Mark can make three tables and one chair in a day, while John can make four tables and one chair in a day.
Refer to the scenario above.Which of the following is true in this case?

A) Mark has a comparative advantage in making tables.
B) John has a comparative advantage in making chairs.
C) Mark has an absolute advantage in making tables.
D) John has an absolute advantage in making tables.

Answer 2

John has an absolute advantage in making tables.

Question 3

The gains from specialization are economic gains for the society from countries/individuals specialize in the production of all goods and services.

Answer 3

False

Question 4

Scenario: Mark can make three tables and one chair in a day, while John can make four tables and one chair in a day.
Refer to the scenario above.Which of the following is true in this case?

A) Mark should specialize in making tables, because he has a lower opportunity cost of producing them.
B) Mark should specialize in making chairs, because he has a lower opportunity cost of producing them.
C) Mark should specialize in making tables, because he has a greater opportunity cost of producing them.
D) Mark should specialize in making chairs, because he has a greater opportunity cost of producing them.

Question 5

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?

A) Corinthia has a comparative advantage in producing watches.
B) Corinthia has an absolute advantage in producing watches.
C) Berylia has a comparative advantage in producing watches.
D) Berylia has an absolute advantage in producing watches.

Question 6

A producer is said to have an absolute advantage in the production of a good when the producer ________ compared to other producers.

A) has a lower opportunity cost
B) has a higher opportunity cost
C) can produce more units of the good per hour
D) can sell the good at a higher price

Question 7

Scenario: Consider two economies, Beta and Zeta. Each farmer in Beta can grow 1,000 pounds of apples or 500 pounds of oranges in a year. Each farmer in Zeta can grow 400 pounds of apples or 1,200 pounds of oranges in a year.
Refer to the scenario above.The opportunity cost of producing 1 pound of apples in Beta is ________.

A) 0.5 pounds of oranges
B) 2 pounds of oranges
C) 10 pounds of oranges
D) 15 pounds of oranges

Question 8

International trade enables an economy to ________.

A) achieve an equitable distribution of wealth
B) specialize in the production of essential goods and services
C) exploit gains from specialization
D) always specialize in the production of capital-intensive goods

Question 9

Trade,both within and across national borders,________.

A) exploits absolute advantage
B) increases productive efficiency
C) discourages specialization in production
D) reduces interdependence among nations

Question 10

A producer is said to have a comparative advantage in the production of a good when the producer ________ compared to other producers.

A) has a lower opportunity cost
B) has a higher sunk cost
C) can produce more units of the good per hour
D) charges a higher price for the good

Question 11

Scenario: Mark can make three tables and one chair in a day, while John can make four tables and one chair in a day.
Refer to the scenario above.John's opportunity cost of making a table is ________.

A) 0.25 of a chair
B) 1 chair
C) 4 chairs
D) 4.25 chairs

Question 12

What are the gains from specialization?

Question 13

Which of the following statements is true of international trade?

A) It discourages workers from specializing in production.
B) It creates supply bottlenecks.
C) It leads to an inefficient allocation of resources.
D) It allows people to choose occupations that suit their talents.

Question 14

Scenario: Mark can make three tables and one chair in a day, while John can make four tables and one chair in a day.
Refer to the scenario above.Which of the following is true in this case?

A) John should specialize in making chairs, and Mark should specialize in making tables.
B) John should specialize in making both chairs and tables.
C) Mark should specialize in making chairs, and John should specialize in making tables.
D) Mark should specialize in making both chairs and tables.

Question 15

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?

A) Domium has a comparative advantage in producing computers.
B) Chromium has an absolute advantage in producing computers.
C) Chromium has a comparative advantage in producing computers.
D) Domium has an absolute advantage in producing computers.

Question 16

Scenario: Mark can make three tables and one chair in a day, while John can make four tables and one chair in a day.
Refer to the scenario above.Mark's opportunity cost of making a table is ________.

A) 0.33 of a chair
B) 1 chair
C) 3 chairs
D) 3.33 chairs

Question 17

Scenario: Mark can make three tables and one chair in a day, while John can make four tables and one chair in a day.
Refer to the scenario above.Mark's opportunity cost of making a chair is ________.

A) 0.33 of a table
B) 1 table
C) 3 tables
D) 3.33 tables

Question 18

Scenario: Mark can make three tables and one chair in a day, while John can make four tables and one chair in a day.
Refer to the scenario above.John's opportunity cost of making a chair is ________.

A) 0.25 of a table
B) 1 table
C) 4 tables
D) 4.25 tables

Question 19

Scenario: Mark can make three tables and one chair in a day, while John can make four tables and one chair in a day.
Refer to the scenario above.Which of the following is true in this case?

A) Mark has both comparative and absolute advantage in making tables.
B) John has both comparative and absolute advantage in making tables.
C) Mark has both comparative and absolute advantage in making chairs
D) John has both comparative and absolute advantage in making chairs.

Question 20

Which of the following statements is true?
i.Specialization does not work without trade.
ii.Trade does not work without specialization.

A) i) and ii) are both true
B) i) and ii) are both false
C) i) is true and ii) is false
D) i) is false and ii) is true

Question 21

Scenario: Consider two economies, Beta and Zeta. Each farmer in Beta can grow 1,000 pounds of apples or 500 pounds of oranges in a year. Each farmer in Zeta can grow 400 pounds of apples or 1,200 pounds of oranges in a year.
Refer to the scenario above.The opportunity cost of producing 1 pound of oranges in Beta is ________.

A) 5 pounds of apples
B) 2 pounds of apples
C) 1 pound of apples
D) 0.5 pounds of apples

Question 22

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.The opportunity cost of producing 1 ton of rice in Country X is ________.

A) 0.31 tons of wheat
B) 3.2 tons of wheat
C) 32 tons of wheat
D) 320 tons of wheat

Question 23

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?

A) Country Y should specialize in producing wheat, and Country X should specialize in producing rice.
B) Country Y should specialize in producing both wheat and rice.
C) Country X should specialize in producing both wheat and rice.
D) Country X should specialize in producing wheat, and Country Y should specialize in producing rice.

Question 24

Scenario: There are two workers in a factory that produces two goods, Good X and Good Y. Worker 1 adds a value of $200 per hour in the production of Good X and a value of $100 per hour in the production of Good Y. Worker 2 adds a value of $125 per hour in the production of Good X and a value of $87.50 per hour in the production of Good Y.
Refer to the scenario above.The opportunity cost per dollar of the value added in the production of Good X by Worker 1 is ________ of the value added in the production of Good Y.

A) $0.50
B) $0.70
C) $87.50
D) $100

Question 25

Scenario: Consider two economies, Beta and Zeta. Each farmer in Beta can grow 1,000 pounds of apples or 500 pounds of oranges in a year. Each farmer in Zeta can grow 400 pounds of apples or 1,200 pounds of oranges in a year.
Refer to the scenario above.Which of the following statements is true in this case?

A) Beta has both comparative and absolute advantage in producing oranges.
B) Zeta has both comparative and absolute advantage in producing oranges.
C) Beta has a comparative advantage in producing oranges and absolute advantage in producing apples.
D) Zeta has a comparative advantage in producing apples and absolute advantage in producing oranges.

Question 26

Scenario: Consider two economies, Beta and Zeta. Each farmer in Beta can grow 1,000 pounds of apples or 500 pounds of oranges in a year. Each farmer in Zeta can grow 400 pounds of apples or 1,200 pounds of oranges in a year.
Refer to the scenario above.The opportunity cost of producing 1 pound of apples in Zeta is ________.

A) 0.67 pounds of oranges
B) 1.5 pounds of oranges
C) 2 pounds of oranges
D) 3 pounds of oranges

Question 27

Scenario: Mike and John work as waiters in a restaurant. Mike can efficiently wait on ten customers per hour, while John can efficiently wait on seven customers per hour. The restaurant also has a bar. If both of them work as bartenders, Mike is able to serve nine customers per hour and John is able to serve ten customers per hour.
Refer to the scenario above.Which of the following statements is true in this case?

A) Mike has a comparative advantage in waiting tables.
B) John has a comparative advantage in waiting tables.
C) John has an absolute advantage in waiting tables.
D) Mike has an absolute advantage in bartending.

Question 28

Scenario: Mike and John work as waiters in a restaurant. Mike can efficiently wait on ten customers per hour, while John can efficiently wait on seven customers per hour. The restaurant also has a bar. If both of them work as bartenders, Mike is able to serve nine customers per hour and John is able to serve ten customers per hour.
Refer to the scenario above.Identify the correct statement about Mike and John.

A) Mike should work in the restaurant as well as in the bar.
B) John should work in the restaurant as well as in the bar.
C) Mike should specialize in waiting on the customers in the restaurant.
D) John should specialize in waiting on the customers in the restaurant.

Question 29

Scenario: Consider two economies, Beta and Zeta. Each farmer in Beta can grow 1,000 pounds of apples or 500 pounds of oranges in a year. Each farmer in Zeta can grow 400 pounds of apples or 1,200 pounds of oranges in a year.
Refer to the scenario above.Which of the following statements is true in this case?

A) Beta and Zeta will suffer losses if they engage in foreign trade.
B) Zeta has an absolute advantage in producing both oranges and apples.
C) Beta has a comparative advantage in producing both oranges and apples.
D) Zeta should specialize in producing oranges, and Beta should specialize in producing apples.

Question 30

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.The opportunity cost of producing 1 ton of rice in Country Y is ________.

A) 0.56 tons of wheat
B) 1.8 tons of wheat
C) 2 tons of wheat
D) 18 tons of wheat

Question 31

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.

Robert is a doctor who earns an average hourly wage of $80.His wife is a teacher and earns an average hourly wage of $35.His daughter works in her college library and earns $12 per hour,while his son is a lawyer and earns $60 per hour.If one of them must stay at the house on a working day to look after their ailing pet,who can do it at the lowest opportunity cost?

A) Robert
B) Robert's wife
C) Robert's daughter
D) Robert's son

Question 32

Scenario: Consider two economies, Beta and Zeta. Each farmer in Beta can grow 1,000 pounds of apples or 500 pounds of oranges in a year. Each farmer in Zeta can grow 400 pounds of apples or 1,200 pounds of oranges in a year.
Refer to the scenario above.Which of the following statements is true in this case?

A) Beta has both comparative and absolute advantage in producing apples.
B) Zeta has both comparative and absolute advantage in producing apples.
C) Beta has a comparative advantage in producing oranges and absolute advantage in producing apples.
D) Zeta has a comparative advantage in producing apples and absolute advantage in producing oranges.

Question 33

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?

A) Country Y has an absolute advantage only in the production of wheat.
B) Country Y has an absolute advantage only in the production of rice.
C) Country X has a comparative advantage in the production of wheat.
D) Country X has a comparative advantage in the production of rice.

Question 34

Scenario: Consider two economies, Beta and Zeta. Each farmer in Beta can grow 1,000 pounds of apples or 500 pounds of oranges in a year. Each farmer in Zeta can grow 400 pounds of apples or 1,200 pounds of oranges in a year.
Refer to the scenario above.The opportunity cost of producing 1 pound of oranges in Zeta is ________.

A) 0.33 pounds of apples
B) 0.5 pounds of apples
C) 1 pound of apples
D) 2 pounds of apples

Question 35

Scenario: Consider two economies, Beta and Zeta. Each farmer in Beta can grow 1,000 pounds of apples or 500 pounds of oranges in a year. Each farmer in Zeta can grow 400 pounds of apples or 1,200 pounds of oranges in a year.
Refer to the scenario above.Which of the following statements is true in this case?

A) Beta has a comparative advantage in producing apples.
B) Zeta has an absolute advantage in producing apples.
C) Beta has a comparative advantage in producing oranges.
D) Zeta has a comparative advantage in producing apples.

Question 36

Scenario: There are two workers in a factory that produces two goods, Good X and Good Y. Worker 1 adds a value of $200 per hour in the production of Good X and a value of $100 per hour in the production of Good Y. Worker 2 adds a value of $125 per hour in the production of Good X and a value of $87.50 per hour in the production of Good Y.
Refer to the scenario above.The opportunity cost per dollar of the value added in the production of Good X by Worker 2 is ________ of the value added in the production of Good Y.

A) $0.50
B) $0.70
C) $87.50
D) $100

Question 37

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 statements is true in this case?

A) Country X has an absolute advantage in the production of wheat.
B) Country X has an absolute advantage in the production of rice.
C) Country Y has a comparative advantage in the production of rice.
D) Country Y has a comparative advantage in the production of wheat.

Question 38

Scenario: There are two workers in a factory that produces two goods, Good X and Good Y. Worker 1 adds a value of $200 per hour in the production of Good X and a value of $100 per hour in the production of Good Y. Worker 2 adds a value of $125 per hour in the production of Good X and a value of $87.50 per hour in the production of Good Y.
Refer to the scenario above.Identify the correct statement.

A) Worker 1 is less productive than Worker 2 at producing Good Y.
B) Worker 1 is more productive than Worker 2 at producing Good X.
C) Worker 2 can produce Good X at a lower opportunity cost than Worker 1.
D) Worker 2 has an absolute advantage in the production of Good Y.

Question 39

Scenario: Mike and John work as waiters in a restaurant. Mike can efficiently wait on ten customers per hour, while John can efficiently wait on seven customers per hour. The restaurant also has a bar. If both of them work as bartenders, Mike is able to serve nine customers per hour and John is able to serve ten customers per hour.
Refer to the scenario above.Which of the following statements is true in this case?

A) Mike has a comparative advantage in bartending.
B) John has a comparative advantage in bartending.
C) John has an absolute advantage in waiting.
D) Mike has an absolute advantage in bartending.

Question 40

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.The opportunity cost of producing 1 ton of wheat in Country X is ________.

A) 0.31 tons of rice
B) 3.1 tons of rice
C) 32 tons of wheat
D) 320 tons of wheat

Question 41

International trade is driven by ________.

A) absolute advantage in the consumption of goods and services
B) absolute advantage in the production of goods and services
C) comparative advantage in the production of goods and services
D) comparative advantage in the consumption of goods and services

Question 42

Comparative advantage and international trade are driven by ________.

A) low average costs in the production of goods and services
B) high average costs in the production of goods and services
C) low opportunity costs in the production of goods and services
D) high opportunity costs in the production of goods and services

Question 43

Scenario: A shoe manufacturer has factories in two countries, Country X and Country Y. Shoe manufacturing involves two main tasks-designing the shoe and stitching it. The value added per hour in each activity by workers in the two countries is shown in the table below.

Refer to the scenario above.The opportunity cost per dollar of value added in designing shoes by workers in Country X is ________.

A) $0.25
B) $0.50
C) $4
D) $12

Question 44

Scenario: There are two workers in a factory that produces two goods, Good X and Good Y. Worker 1 adds a value of $200 per hour in the production of Good X and a value of $100 per hour in the production of Good Y. Worker 2 adds a value of $125 per hour in the production of Good X and a value of $87.50 per hour in the production of Good Y.
Refer to the scenario above.Which of the following is true in this case?

A) Both the workers should specialize in the production of Good X.
B) Both the workers should specialize in the production of Good Y.
C) Worker 1 should produce Good X, and Worker 2 should produce Good Y.
D) Worker 1 should produce Good Y, and Worker 2 should produce Good X.

Question 45

Scenario: A shoe manufacturer has factories in two countries, Country X and Country Y. Shoe manufacturing involves two main tasks-designing the shoe and stitching it. The value added per hour in each activity by workers in the two countries is shown in the table below.

Refer to the scenario above.The opportunity cost per dollar of value added in stitching shoes by workers in Country Y is ________.

A) $0.25
B) $0.50
C) $2
D) $4

Question 46

Explain how the gains from comparative advantage are realized.

Question 47

Scenario: A shoe manufacturer has factories in two countries, Country X and Country Y. Shoe manufacturing involves two main tasks-designing the shoe and stitching it. The value added per hour in each activity by workers in the two countries is shown in the table below.

Refer to the scenario above.The opportunity cost per dollar of value added in designing shoes by workers in Country Y is ________.

A) $0.25
B) $0.50
C) $2
D) $4

Question 48

When international trade is based on the concept of comparative advantage,then a country will specialize in producing goods that the country can produce ________.

A) at a lower cost than other countries in the same time span
B) at a higher price than other countries in the same time span
C) more of than other countries in the same time span
D) faster than other countries in the same time span

Question 49

A factory manufactures bags and shoes.There are two workers in the factory.The number of bags or pairs of shoes that each of them can produce in a day is given in the table below:

a)What is the opportunity cost of producing a bag for each worker?
b)Which worker should specialize in the production of shoes and why?

Question 50

Scenario: A shoe manufacturer has factories in two countries, Country X and Country Y. Shoe manufacturing involves two main tasks-designing the shoe and stitching it. The value added per hour in each activity by workers in the two countries is shown in the table below.

Refer to the scenario above.Identify the correct statement.

A) Country Y has an absolute advantage in designing shoes.
B) Country X has a comparative advantage in stitching shoes.
C) Country X has a comparative advantage in designing shoes.
D) Country Y has an absolute advantage in stitching shoes.

Question 51

The gains from comparative advantage cannot be realized without trade.

Question 52

Scenario: A shoe manufacturer has factories in two countries, Country X and Country Y. Shoe manufacturing involves two main tasks-designing the shoe and stitching it. The value added per hour in each activity by workers in the two countries is shown in the table below.

Refer to the scenario above.Which of the following statements is true in this case?

A) The opportunity cost of designing shoes is lower in Country X.
B) The opportunity cost of stitching shoes is lower in Country X.
C) Country Y has an absolute advantage in stitching shoes.
D) Country Y has an absolute advantage in designing shoes.

Question 53

Scenario: There are two workers in a factory that produces two goods, Good X and Good Y. Worker 1 adds a value of $200 per hour in the production of Good X and a value of $100 per hour in the production of Good Y. Worker 2 adds a value of $125 per hour in the production of Good X and a value of $87.50 per hour in the production of Good Y.
Refer to the scenario above.Which of the following is true in this case?

A) Worker 1 has a comparative advantage in the production of Good X.
B) Worker 2 has a comparative advantage in the production of Good X.
C) Worker 1 has an absolute advantage only in the production of Good Y.
D) Worker 2 has an absolute advantage in the production of both goods.

Question 54

Scenario: A shoe manufacturer has factories in two countries, Country X and Country Y. Shoe manufacturing involves two main tasks-designing the shoe and stitching it. The value added per hour in each activity by workers in the two countries is shown in the table below.

Refer to the scenario above.The opportunity cost per dollar of value added in stitching shoes by workers in Country X is ________.

A) $0.25
B) $0.50
C) $2
D) $4

Question 55

Comparative advantage alone is sufficient for individuals to receive gains from specialization.

Question 56

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) There will be no change in the price of armor in Asgard.
B) The world price of armor will increase.
C) More armor will be demanded in Asgard.
D) More armor will be produced in Asgard.

Question 57

Market prices will adjust so that individuals choose occupations in which they have ________.

A) absolute advantage in the production of goods or services
B) the lowest value added in the production of goods or services
C) comparative advantage in the production of goods or services
D) the highest opportunity cost in the production of goods or services

Question 58

If the price of swords in Winterfell is lower than it is in Kings' Landing before these two regions start trading,we can conclude with certainty that ________.

A) Winterfell has absolute advantage in producing swords
B) Winterfell has comparative advantage in producing swords
C) King's Landing has absolute advantage in producing swords
D) King's Landing has comparative advantage in producing swords

Question 59

Xenonia and Baltonia are two neighboring countries.Xenonia can either produce 300 pounds of rice or 100 bushels of corn in a year,while Baltonia can either produce 500 pounds of rice or 200 bushels of corn in a year.Can mutually profitable trade take place between the two countries? Explain your answer.

Question 60

Joe and Billy are two classmates who need to work on a physics assignment together.The assignment includes sketching some diagrams and typing a brief description of each diagram.The table below shows the number of diagrams that each of them can sketch in an hour and the number of pages they can type in an hour.

a)Who has a comparative advantage in sketching?
b)Who should specialize in which task and why?

Question 61

A tariff is a(n)________.

A) agreement to reduce exports
B) tax on imports
C) tax on exports
D) licensing regulation to limit imports

Question 62

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

Question 63

Which of the following is true of tariffs?

A) They encourage international trade.
B) They are special taxes levied on exports.
C) They reduce the volume of imports.
D) They decrease the prices of exports.

Question 64

A U.S.company buying toys manufactured in China is an example of a(n)________.

A) export by China
B) import by China
C) transfer payment to the United States
D) transfer payment to China

Question 65

An economy that trades freely with the rest of the world is called a(n)________ economy.

A) closed
B) open
C) command
D) communist

Question 66

A U.S.company selling cameras to a Japanese company is an example of a(n)________.

A) export to the United States
B) import by Japan
C) foreign direct investment by the United States
D) transfer payment to the United States

Question 67

Taxes levied on imports are called ________.

A) tariffs
B) quotas
C) embargo
D) seigniorage

Question 68

Identify the correct statement.

A) Transfer payments refer to the payments made to foreign firms.
B) Net exports are the value of a country's exports minus the value of its transfer payments.
C) Imports refer to the goods and services that are produced abroad and sold domestically.
D) Exports refer to the goods and services that are produced abroad and consumed domestically.

Question 69

Which of the following is true of international trade?

A) International trade in services is not allowed.
B) International trade benefits all trading nations equally.
C) International trade increases overall economic efficiency.
D) International trade reduces total surplus in an economy.

Question 70

The opportunity cost of producing a laptop is lower in Country Y than in Country X,while the opportunity cost of producing wheat is lower in Country X than in Country Y.However,Country Y can produce more of both goods.
a)Can mutually beneficial trade take place between the two countries? Explain your answer.
b)Which country should specialize in the production of which good?

Question 71

An economy that does not trade with the rest of the world is known as a(n)________ economy.

A) open
B) closed
C) command
D) communist

Question 72

Autarkia imports oil and natural gas from and exports food grains to the rest of the world.Based on this information,we can conclude that Autarkia is a(n)________ economy.

A) open
B) closed
C) command
D) communist

Question 73

Which of the following statements is correct?

A) Transfer payments from foreigners represent the payments that domestic residents receive from assets owned in foreign countries.
B) Imports refer to the goods and services that are produced domestically and consumed abroad.
C) Exports refer to the goods and services that are produced domestically and sold abroad.
D) Factor payments from foreigners represent the "gifts" received from individuals who reside abroad or from foreign governments.

Question 74

A country specializes in the production of a good in which it has comparative advantage.What happens once international trade is established?

A) All domestic households win.
B) All foreign households win.
C) Some households win, some households lose, but overall the losses outweigh the gains.
D) Some households win, some households lose, but overall the gains outweigh the losses.

Question 75

Corinthia is a small agricultural country that does not trade with the rest of the world.Based on this information,we can conclude that Corinthia is a(n)________ economy.

A) open
B) closed
C) command
D) communist

Question 76

Does international trade benefit all the economic agents in a country when the country is opened to international trade? Explain your answer.

Question 77

Montesia specializes in the production of heavy machinery.It exports machinery to the rest of the world and imports oil from Gulf countries.Based on this information,we can conclude that Montesia is a(n)________ economy.

A) closed
B) open
C) command
D) communist

Question 78

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.

Question 79

Differentiate between a closed economy and an open economy.

Question 80

Technical support provided by an Indian firm to a multinational company headquartered in New York is an example of a(n)________.

A) import of services by India
B) export of services by India
C) capital account transaction
D) transfer payment to the United States