Deck 18: Gaining From International Trade

Question 1

Trade restrictions like tariffs and quotas will

A)protect American jobs and increase employment.
B)ensure that more dollars stay in the United States.
C)reduce the value of goods and services that we will be able to produce and consume.
D)make all Americans better off.

Answer 1

C

Question 2

Suppose the United States reduced the tariff on television sets,allowing foreign-produced televisions to more freely enter the U.S.market.Which of the following would most likely occur?

A)The price of televisions to U.S.consumers would increase,and the demand for U.S.export products would rise.
B)The price of televisions to U.S.consumers would fall,and the demand for U.S.export products would fall.
C)The price of televisions to U.S.consumers would increase,and the demand for U.S.export products would fall.
D)The price of televisions to U.S.consumers would fall,and the demand for U.S.export products would rise.

Answer 2

D

Question 3

International trade is advantageous because trade makes it possible for people in each country to

A)import more than they export.
B)export more than they import.
C)employ more of their domestic resources producing things that are costly for them to produce domestically.
D)acquire goods from foreigners more economically than they could be produced domestically.
E)do all of the above.

Answer 3

D

Question 4

Which of the following has resulted from the North American Free Trade Agreement (NAFTA)?

A)Domestic producers in the United States,Canada,and Mexico have free access to larger markets.
B)The low wages of Mexican workers have made it virtually impossible for American and Canadian producers to export goods to Mexico.
C)A smaller variety of goods are available to consumers in all three countries.
D)Unemployment has increased in all three countries.

Question 5

Which of the following is true?

A)In recent decades,the volume of U.S.international trade has been declining as a share of the economy.
B)Most of the textile products produced in the United States are exported abroad.
C)The volume of U.S.trade with Canada is larger than for any other country.
D)If one party to an international exchange gains,the other party must lose a similar amount.

Question 6

Assume the United States can use a given amount of its resources to produce either 20 airplanes or 8 automobiles and Japan can employ the same amount of its resources to produce either 20 airplanes or 10 automobiles.The U.S.should specialize in

A)airplanes.
B)automobiles.
C)both goods.
D)neither good.

Question 7

Hong Kong and Singapore both have relatively

A)high trade barriers and high rates of economic growth.
B)high trade barriers and low rates of economic growth.
C)low trade barriers and high rates of economic growth.
D)low trade barriers and low rates of economic growth.

Question 8

Compared to the no-trade situation,if the United States imports shoes,

A)the price of shoes will decline in the domestic market.
B)domestic shoemakers will be able to charge higher prices.
C)domestic shoemakers will expand both output and employment.
D)U.S.consumers will be harmed.

Question 9

Measured as a share of the economy,the size of the trade sector (exports plus imports)of the United States has

A)been increasing since 1980,but it declined during 1960-1980.
B)been relatively constant during the last four decades.
C)increased by about 10 percent during the last four decades.
D)approximately doubled since 1980 and tripled since 1960.

Question 10

Opening trade between two nations would

A)shift their production possibilities curves outward.
B)shift their production possibilities curves inward.
C)leave the production possibilities unchanged and increase their consumption possibilities.
D)leave the production possibilities unchanged and decreased their consumption possibilities.

Question 11

Is it possible for a country to have an absolute disadvantage and a comparative advantage in the production of a good?

A)No,these are incompatible on theoretical grounds.
B)No,theory prevents it,but some economists claim it could occur.
C)Yes,this situation can occur.
D)Yes,in theory,although not in reality.

Question 12

A nation benefits from international trade if it

A)exports more than it imports.
B)imports more than it exports.
C)imports goods for which it is a low opportunity cost producer.
D)exports goods for which it is a low opportunity cost producer.

Question 13

In recent years,the largest trading partners of the United States have been

A)Germany,France,Spain,and the United Kingdom.
B)Canada,Mexico,China,and Japan.
C)Canada,Brazil,Argentina,and Chile.
D)Russia,Venezuela,Saudi Arabia,and Indonesia.

Question 14

Which of the following is true?

A)In recent decades,the volume of U.S.international trade has been increasing as a share of the economy.
B)As transportation costs decline,the volume of international trade will also tend to decline.
C)Most international trade is between the governments of different nations.
D)If one party to an international exchange gains,the other party must lose a similar amount.

Question 15

Many products consumed by Americans are imported.Imports account for the largest share of which of the following products consumed by Americans?

A)civilian airplanes
B)automobiles
C)construction equipment
D)radio and television sets

Question 16

International trade does all the following except

A)allow a country to specialize in producing certain goods and services.
B)reduce world output.
C)allow a country to move to higher consumption levels.
D)increase world output.

Question 17

A U.S.trade policy that restricts the sale of foreign goods in the U.S.market will

A)reduce the demand for U.S.export goods since foreigners will be less able to buy our goods if they cannot sell to us.
B)benefit producers in industries that export goods.
C)increase the nation's income since it protects domestic jobs.
D)enhance economic efficiency by allocating more resources to the areas of their greatest comparative advantage.

Question 18

Large quantities of many products produced in the United States are exported to purchasers in other countries.Exports account for the largest share of which one of the following products produced in the United States?

A)shoes
B)civilian aircraft
C)radio and television sets
D)petroleum

Question 19

The political popularity of a tariff on imported goods that compete with products of a well-established domestic industry is

A)surprising since one would expect the political power of consumers to override the interests of even a well-established domestic industry.
B)surprising since one would expect the economic harm resulting from tariffs to be well understood by voters.
C)not surprising since such a tariff would generally benefit an easily recognized interest group at the expense of uninformed,uninterested consumers.
D)not surprising since the tariff enables domestic producers and consumers to gain at the expense of foreigners.

Question 20

Imposing a restrictive quota on the import of spiked track shoes will likely

A)increase the price of the shoes but decrease the quantity consumed.
B)increase both the price of the shoes and the quantity consumed.
C)leave the price of the shoes unchanged but decrease the quantity consumed.
D)leave the price of the shoes unchanged and also leave the quantity consumed unchanged.

Question 21

If nation A has an absolute advantage over nation B in the production of a product,this implies that

A)it requires fewer resources in A to produce the good than in B.
B)the cost of producing the good in terms of some other good's production that must be sacrificed is lower in A than in B.
C)nation B could not benefit by engaging in trade with A.
D)nation A should acquire this product by trading with B.
E)nation A could not benefit by engaging in trade with B.

Question 22

People living in different countries can benefit from international trade because

A)different countries use different currencies.
B)trade makes it possible for the residents of different countries to specialize in the production of those things they do best.
C)trade makes it possible for people to acquire goods from foreigners cheaper than they could be produced domestically.
D)both b and c are correct.
E)all of the above are correct.

Question 23

The theory of comparative advantage suggests that nations should produce a good if they

A)have the lowest opportunity cost.
B)have the lowest wages.
C)have the most resources.
D)can produce more of the good than any other nation.

Question 24

If domestic producers have a comparative advantage in producing a good,

A)trade restrictions will be required before the producers can benefit from their comparative advantage.
B)trade restrictions will still be required before the domestic producers can compete with low-wage producers abroad.
C)they will be able to compete effectively in a competitive world market.
D)the government should subsidize production of the good so the domestic producers will be able to achieve a larger share of the world market.

Question 25

Use the table below,which outlines the production possibilities of Qatar and Botswana in wine and wheat,to answer the following question.

The law of comparative advantage suggests that

A)neither country would gain from trade,even if the costs for transporting the products were zero.
B)Qatar would not gain from trade because it has an absolute advantage in producing both goods.
C)both countries would gain if Botswana traded wine made in Botswana for Qatar's wheat.
D)both countries would gain if Botswana traded wheat grown in Botswana for Qatar's wine.

Question 26

Opportunity costs differ among nations primarily because

A)nations employ different currencies.
B)nations have different endowments of land,labor skills,capital,and technology.
C)nations have different political institutions.
D)work-leisure preferences vary considerably from one nation to another.

Question 27

Nations will be able to produce a larger joint output and realize mutual gains when each specializes in the production of those items for which it is a low-opportunity cost producer and trades for those things that it could produce only at a high cost.This statement best describes the

A)free rider problem.
B)infant-industry argument.
C)law of comparative advantage.
D)equation of exchange.

Question 28

Use the table below to answer the following question.The table outlines the production possibilities of Slavia and Italia for food and clothing.

Which of the following is true?

A)Italia has a comparative advantage in producing both food and clothing.
B)Italia is the low-opportunity cost producer of clothing.
C)Slavia is the low-opportunity cost producer of food.
D)Italia has a comparative advantage in producing food.

Question 29

According to international trade theory,a country can gain

A)if it protects domestic industries from low-wage foreign producers.
B)only if the trade harms its trading partners.
C)by importing goods when they can be obtained more economically from foreign producers.
D)if it maximizes the employment in domestic industries that face competition from foreign producers who have lower costs.

Question 30

Use the table below to answer the following question.The table outlines the production possibilities of Slavia and Italia for food and clothing.

The law of comparative advantage suggests that

A)neither country could gain from trade,even if the costs of transporting the products were zero.
B)Italia could not gain from trade because it has an absolute advantage in producing both goods.
C)both countries could gain if Italia traded food for clothing produced in Slavia.
D)both countries could gain if Slavia traded food for clothing produced in Italia.

Question 31

Assume,for the U.S. ,that the domestic price of beef without international trade is lower than the world price of beef.This suggests that with trade,

A)the U.S.has a comparative advantage in the production of beef over other countries and the U.S.will export beef.
B)the U.S.has a comparative advantage in the production of beef over other countries and the U.S.will import beef.
C)other countries have a comparative advantage over the U.S.in the production of beef and the U.S.will export beef.
D)other countries have a comparative advantage over the U.S.in the production of beef and the U.S.will import beef.

Question 32

Which of the following provides the foundation of the case for free trade?

A)the law of diminishing marginal utility
B)the anti-dumping argument
C)the industrial diversity argument
D)the law of comparative advantage

Question 33

The law of comparative advantage explains why a nation will benefit from trade when

A)it exports more than it imports.
B)its trading partners are experiencing offsetting losses.
C)it exports goods for which it is a high-opportunity cost producer,while importing those for which it is a low-opportunity cost producer.
D)it exports goods for which it is a low-opportunity cost producer,while importing those for which it is a high-opportunity cost producer.

Question 34

Suppose the United States exports cars to France and imports cheese from Switzerland.This situation suggests that

A)the United States has a comparative advantage relative to Switzerland in producing cheese,and France has a comparative advantage relative to the United States in producing cars.
B)the United States has a comparative advantage relative to France in producing cars,and Switzerland has a comparative advantage relative to the United States in producing cheese.
C)the United States has an absolute advantage relative to Switzerland in producing cheese,and France has an absolute advantage relative to the United States in producing cars.
D)the United States has an absolute advantage relative to France in producing cars,and Switzerland has an absolute advantage relative to the United States in producing cheese.

Question 35

Use the table below to answer the following question.The table outlines the production possibilities for two hypothetical countries.

Which of the following statements is true?

A)Redland has a comparative advantage in producing oats.
B)Redland enjoys a comparative advantage in producing both products and could not gain from exchange.
C)Redland should specialize in producing mutton and should trade for oats.
D)In this example,Blueland has nothing to gain through trade with Redland.

Question 36

According to international trade theory,a country can gain if it

A)imports goods when they can be purchased cheaper from domestic producers.
B)imports goods when foreigners are willing to pay higher prices than domestic consumers.
C)specializes in producing those things it does best (produces at a low cost).
D)trades with high-income countries but not low-income countries.

Question 37

The following table indicates the production possibilities of food and clothing per worker day in the United States and South Korea.

Which of the following is true?

A)Mutual gains from trade could be realized if the United States specialized in clothing production and South Korea in production of food.
B)South Korean workers are the low-cost producers of clothing.
C)Mutual gains could be realized if the United States specialized in producing food and South Korea in producing clothing.
D)U.S.workers are the high-cost producers of clothing.

Question 38

Assume,for Canada,that the domestic price of steel without international trade is higher than the world price of steel.This suggests that with trade,

A)Canada has a comparative advantage in the production of steel over other countries and Canada will import steel.
B)Canada has a comparative advantage in the production of steel over other countries and Canada will export steel.
C)other countries have a comparative advantage over Canada in the production of steel and Canada will import steel.
D)other countries have a comparative advantage over Canada in the production of steel and Canada will export steel.

Question 39

If the United States unilaterally removed all of its trade restrictions and moved toward a policy of free trade,international trade theory indicates that

A)U.S.residents would gain,but people in other countries would be worse off.
B)people in other countries would gain,but U.S.residents would be worse off.
C)both U.S.residents and people in other countries would be able to achieve higher income levels.
D)the average income level would be lower in both the United States and other countries.

Question 40

The law of comparative advantage indicates that

A)specialization and exchange will permit trading partners to maximize their joint output.
B)a nation can gain from trade only if it is not at an absolute disadvantage in producing all goods.
C)a nation can gain from trade only when its trading partners are not low-wage countries.
D)countries should export products for which they are high-opportunity cost producers.

Question 41

When Brazil can generate a product using fewer labor hours and resources than the United States,an economist would say that Brazil had

A)a comparative advantage in production of the product.
B)an absolute advantage in production of the product.
C)a higher opportunity cost of producing the product.
D)no incentive to import the product,regardless of the cost-price conditions for other products.

Question 42

The following table indicates the production possibilities of food and clothing per worker day in the United States and Japan.

Which of the following is true?

A)Since U.S.workers produce more of both food and clothing than Japanese workers,no gains from trade are possible.
B)Mutual gains from trade could be realized if the United States specialized in food production and Japan in clothing production.
C)The Japanese are the low-cost producers of both food and clothing.
D)Joint output would be maximized if the United States specialized in producing clothing and Japan in producing food.

Question 43

The following table indicates the production possibilities of food and clothing per worker day in the United States and Japan.

Which of the following is true?

A)Mutual gains from trade could be realized if the United States specialized in food production and Japan in clothing production.
B)Since Japanese workers produce more of both food and clothing than U.S.workers,no gains from trade are possible.
C)Joint output would be maximized if the United States specialized in producing clothing and Japan in producing food.
D)The Japanese are the low-cost producers of both food and clothing.

Question 44

Suppose there are only two goods in the world,wheat and shoes.If it is true that with its vast resources the United States could produce both more wheat and more shoes than Brazil,

A)Brazil will never have a comparative advantage and,thus,can never gain from trading with the United States.
B)trade between the United States and Brazil will make the United States better off but will leave Brazil worse off unless the wage of workers in Brazil rises to equal that of American workers.
C)total production of wheat and shoes cannot be increased through specialization and trade.
D)both countries will be able to gain from specialization and trade as long as relative costs of producing the two goods are different in Brazil than in the United States.

Question 45

For each watch Denmark produces,it gives up the opportunity to make 50 pounds of cheese.Germany can produce one watch for every 100 pounds of cheese it produces.Which of the following is true with regard to opportunity costs in the two countries?

A)The opportunity cost of producing watches is higher in Denmark.
B)The opportunity cost of producing cheese is higher in Denmark.
C)The opportunity cost of producing cheese is identical in both countries.
D)It is impossible to compare opportunity costs because the two countries use different currencies.
E)In both countries combined,the opportunity cost of one watch is 150 pounds of cheese.

Question 46

The following table indicates the production possibilities of cars and clothing per worker day in the United States and Japan.

Which of the following is true?

A)No gains from trade are possible.
B)Joint output would be maximized if the United States specialized in producing cars and Japan in producing clothing.
C)Mutual gains from trade could be realized if the United States specialized in clothing production and Japan in car production.
D)The Japanese are the high-cost producers of both cars and clothing.

Question 47

If a country allows trade and,for a certain good,the domestic price without trade is higher than the world price,

A)the country will be an exporter of the good.
B)the country will be an importer of the good.
C)the country will be neither an exporter nor an importer of the good.
D)Additional information is needed about demand to determine whether the country will be an exporter of the good,an importer of the good,or neither.

Question 48

The following table indicates the production possibilities of food and clothing per worker day in the United States and South Korea.

Which of the following is true?

A)Mutual gains could be realized if the United States specialized in producing food and South Korea in producing clothing.
B)Mutual gains could be realized if the United States specialized in clothing production and South Korea in food production.
C)South Korean workers are the high-cost producers of clothing.
D)None of the above are true.

Question 49

International trade and competition from abroad

A)provide domestic producers with a strong incentive to improve the quality of their products and keep their costs low.
B)will make it more difficult for domestic producers to realize fully the potential gains from economies of scale in production.
C)will make it more difficult for domestic consumers in small countries to purchase from large scale producers.
D)do all of the above.
E)do none of the above.

Question 50

Compared to the no-trade situation,when a country exports a good,

A)domestic consumers gain,domestic producers lose,and the gains outweigh the losses.
B)domestic producers gain,domestic consumers lose,and the gains outweigh the losses.
C)domestic consumers gain,domestic producers lose,and the losses outweigh the gains.
D)domestic producers gain,but domestic consumers lose an equal amount.

Question 51

Which of the following is true?

A)When economies of scale are important in an industry,the domestic market of a small country may not be large enough to support cost-efficient firms.
B)In small countries,firms in industries where economies of scale are important will tend to export little,if any,of their output.
C)The size of the trade sector (exports plus imports)as a share of GDP will generally be larger in more populous countries than in smaller less-populated countries.
D)Countries with higher trade barriers have higher growth rates.

Question 52

For each watch Denmark produces,it gives up the opportunity to make 50 pounds of cheese.Germany can produce one watch for every 100 pounds of cheese it produces.Which of the following is true with regard to opportunity costs in the two countries?

A)The opportunity cost of producing watches is lower in Denmark.
B)The opportunity cost of producing cheese is lower in Denmark.
C)The opportunity cost of producing watches is identical in both countries.
D)It is impossible to compare opportunity costs because the two countries use different currencies.
E)In Germany the opportunity cost of producing one pound of cheese is one watch.

Question 53

If a country allows trade and,for a certain good,the domestic price without trade is lower than the world price,

A)the country will be an exporter of the good.
B)the country will be an importer of the good.
C)the country will be neither an exporter nor an importer of the good.
D)Additional information is needed about demand to determine whether the country will be an exporter of the good,an importer of the good,or neither.

Question 54

Compared to the no-trade situation,when a country imports a good,

A)domestic consumers gain,domestic producers lose,and the gains outweigh the losses.
B)domestic consumers lose,domestic producers gain,and the gains outweigh the losses.
C)domestic consumers gain,domestic producers lose,and the losses outweigh the gains.
D)domestic consumers gain,but domestic producers lose an equal amount.

Question 55

Firms in a high-wage nation such as the U.S.can compete effectively with imports from low-wage nations if

A)skill levels are identical in the nations
B)the U.S.reduces tariffs on imports
C)low-wage nations impose tariffs on U.S.made goods
D)labor productivity is higher in the low-wage nation
E)labor productivity is higher in the U.S.

Question 56

If Country A has an absolute advantage over Country B in the production of every commodity,

A)mutual gains from trade between Country A and Country B would be impossible.
B)Country B would be able to gain from trade but not country A.
C)the joint output of the two countries could not be increased through specialization and exchange.
D)mutual gains from trade would still be possible.

Question 57

Which of the following is true?

A)Competition from abroad fails to provide domestic producers with a strong incentive to improve the quality of their products and keep their costs low.
B)When economies of scale are important in an industry,international trade benefits domestic consumers but harms domestic producers.
C)When economies of scale are important in an industry,international trade will be particularly important for domestic producers operating in small countries.
D)Economies of scale eliminate the potential gains from international trade.

Question 58

The following table indicates the production possibilities of food and clothing per worker day in the United States and Japan.

Which of the following is true?

A)No gains from trade are possible.
B)Joint output would be maximized if the United States specialized in producing clothing and Japan in producing food.
C)Mutual gains from trade could be realized if the United States specialized in food production and Japan in clothing production.
D)The Japanese are the high-cost producers of both food and clothing.

Question 59

International trade can be mutually advantageous because it

A)encourages the adoption of sound institutions and policies.
B)reduces the competitiveness of domestic industries and,thereby,makes it easier for the domestic producers to raise their prices.
C)permits the trading partners to take advantage of reductions in per-unit costs in industries where economies of scale are important.
D)does all of the above.
E)does both a and c.

Question 60

Which of the following is true?

A)Specialization and trade leads to mutual gains for countries.
B)Protectionism (i.e. ,policies that limit trade in certain goods)promotes both economic prosperity and greater employment.
C)Countries that have a lot of resources,like the United States,are always hurt by trade.
D)Countries will have a higher standard of living when they produce as many goods as possible domestically.

Question 61

Which of the following is correct?

A)An increase in the tariff on foreign-produced automobiles will benefit U.S.consumers of domestic cars.
B)An ongoing result of the North American Free Trade Agreement is that producers in both countries will benefit at the expense of consumers.
C)The wages of U.S.workers would sharply decline if we traded freely with low-wage countries like India and China.
D)Exports provide a nation with its primary source of purchasing power used to buy imported goods.

Question 62

A tariff can be defined simply as a

A)tax on imports.
B)tax on exports.
C)legal limit on imports.
D)legal limit on exports.

Question 63

As a result of a tariff on an imported good,

A)domestic producers are better off because they sell more goods at the same price.
B)domestic producers are better off because they sell more goods at a higher price.
C)domestic producers are better off because they sell the same quantity of goods at a higher price.
D)domestic consumers are better off because there are more domestically produced goods available.
E)domestic consumers are neither better off nor worse off because imports do not change.

Question 64

When a country allows trade and becomes an exporter of a good,

A)the gains of the domestic producers of the good exceed the losses of the domestic consumers of the good.
B)the gains of the domestic consumers of the good exceed the losses of the domestic producers of the good.
C)the losses of the domestic producers of the good exceed the gains of the domestic consumers of the good.
D)the losses of the domestic consumers of the good exceed the gains of the domestic producers of the good.

Question 65

What impact will a decrease in the supply of ball-point pens imported to the United States have on the domestic price of ball-point pens? Assume the pens are virtually identical regardless of country of origin.

A)The domestic price will fall.
B)The domestic price will rise.
C)The domestic price will remain constant.
D)It is impossible to predict the impact.

Question 66

The primary source of purchasing power used to buy imported goods is the

A)revenue received from exports.
B)monetary sector.
C)balance of payments deficit.
D)domestic currency of a nation.

Question 67

As a result of a tariff on imports,

A)imports will fall,exports will fall,and total output will decline.
B)imports will fall,exports will rise,and total output will decline.
C)imports will rise,exports will fall,and total output will expand.
D)imports will rise,exports will rise,and total output will expand.

Question 68

Which of the following restricts the volume of international trade?

A)quotas
B)well-enforced property rights
C)a stable international monetary framework
D)an increase in the rate of economic growth

Question 69

If the United States imposes an import quota on clothing,U.S.imports

A)increase,exports increase,and U.S.net exports are unchanged.
B)increase,exports decrease,and U.S.net exports increase.
C)decrease,exports increase,and U.S.net exports decrease.
D)decrease,exports decrease,and U.S.net exports are unchanged.

Question 70

If the U.S.put an import quota on vacuum cleaners,it would

A)raise U.S.net exports of vacuum cleaners and raise net exports of other U.S.goods.
B)raise U.S.net exports of vacuum cleaners and lower net exports of other U.S.goods.
C)lower U.S.net exports of vacuum cleaners and raise net exports of other U.S.goods.
D)lower U.S.net exports of vacuum cleaners and lower net exports of other U.S.goods.

Question 71

If the U.S.imposed an import quota on beef,then in the U.S.

A)exports and imports would rise.
B)exports and imports would fall.
C)exports would rise and imports would fall.
D)exports would fall and imports would rise.

Question 72

Relative to a no-trade situation,if the United States imported wine,the U.S.domestic price of wine would

A)rise,but domestic output would fall.
B)decline,but domestic output would rise.
C)decline as would domestic output.
D)rise as would domestic output.

Question 73

Relative to a no-trade situation,if the United States exported wheat,the domestic price of wheat

A)would rise,and domestic output would also rise.
B)would decline,but the domestic output would rise.
C)would decline,and domestic output would decline also.
D)would rise,but domestic output would fall.

Question 74

When the nation of Duxembourg allows trade and as a result becomes an importer of software,

A)residents who produce software become worse off;residents who buy software become better off;and the economic well-being of Duxembourg rises.
B)residents who produce software become worse off;residents who buy software become better off;and the economic well-being of Duxembourg falls.
C)residents who produce software become better off;residents who buy software become worse off;and the economic well-being of Duxembourg rises.
D)residents who produce software become better off;residents who buy software become worse off;and the economic well-being of Duxembourg falls.

Question 75

Which of the following is most likely to increase U.S.exports?

A)The government gives subsidies to U.S.firms that export goods or services.
B)The government reduces the size of the budget surplus.
C)The United States unilaterally reduces its restrictions on foreign imports.
D)Taxes on domestic saving rise.

Question 76

When a country allows trade and becomes an importer of steel,

A)the losses of the domestic producers of steel exceed the gains of the domestic consumers of steel.
B)the losses of the domestic consumers of steel exceed the gains of the domestic producers of steel.
C)the gains of the domestic producers of steel exceed the losses of the domestic consumers of steel.
D)the gains of the domestic consumers of steel exceed the losses of the domestic producers of steel.

Question 77

The United States is the world's leading grain-producing nation.Exporting U.S.grain causes the

A)domestic consumption of grain to rise because of the added foreign demand.
B)price of grain in the domestic market to fall because foreigners are now taking some of the domestic demand.
C)price of grain to domestic consumers to rise because of the added foreign demand.
D)standard of living of foreigners to fall because they lose purchasing power.

Question 78

The primary source of purchasing power used to buy imported goods is

A)the monetary sector.
B)the balance of payments deficit.
C)the exports of a nation.
D)taxation and other revenue-generating activities.

Question 79

A tax levied on imported goods is called

A)an excise tax.
B)a quota.
C)a foreign profits tax.
D)a tariff.

Question 80

When the nation of Econoland allows trade and as a result becomes an exporter of televisions,

A)residents who produce televisions become worse off;residents who buy televisions become better off;and the economic well-being of Econoland rises.
B)residents who produce televisions become worse off;residents who buy televisions become better off;and the economic well-being of Econoland falls.
C)residents who produce televisions become better off;residents who buy televisions become worse off;and the economic well-being of Econoland rises.
D)residents who produce televisions become better off;residents who buy televisions become worse off;and the economic well-being of Econoland falls.