Deck 8: The Export-Import Sector

Question 1

Statement I: The euro has largely replaced the dollar in international trade.
Statement II: Every European nation except Russia and Yugoslavia are members of the European Union.

A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Answer 1

D

Question 2

The basis for international trade is

A)self-sufficiency.
B)specialization.
C)amassing national wealth at the expense of trading partners.
D)maximizing your exports and minimizing your imports.

Answer 2

B

Question 3

Which statement is true?

A)C + I + G + X_n has always been higher than C + I +
B)C + I + G has always been higher than C + I + G + X_n.
C)C + I + G has always been equal to C + I + G + X_n.
D)None of these statements are true.
G)

Answer 3

D

Question 4

Net exports is a negative figure when

A)a nation's exports of goods and services exceed its imports
B)depreciation exceeds gross private domestic investment
C)the economy's stock of capital is declining
D)a nation's imports of goods and services exceed its exports

Question 5

Net exports is a negative figure whenever

A)a nation's exports of goods and services exceed its imports.
B)a nation's imports of goods and services exceed its exports.
C)inventories dwindle.
D)gross savings is greater than net investment.

Question 6

The members of NAFTA include

A)only the United States and Mexico.
B)only the United States and Canada.
C)only Mexico and Canada.
D)the United States,Canada,and Mexico.

Question 7

If U.S.imports of goods and services exceed exports

A)GDP in the United States will be less than the sum of consumption,investment,and government purchases.
B)GDP in the United States will exceed the sum of consumption,investment and government purchases.
C)net exports for the United States are positive.
D)None of the choices are true.

Question 8

Our trade balance in merchandise is ________ and our trade balance in services is _________.

A)positive,positive
B)negative,negative
C)negative,positive
D)positive,negative

Question 9

The sum of our imports and exports is equal to about _________% of our GDP.

A)10
B)20
C)25
D)30
E)40

Question 10

The NAFTA agreement affects our trade with

A)AsiA.
B)North America.
C)Africa.
D)The OPEC nations.
E)The European Common Market.

Question 11

Since the formation of NAFTA,our trade deficit with Mexico has gone ___________ and our trade deficit with Canada has gone ___________.

A)up,up
B)down,down
C)up,down
D)down,up

Question 12

We run a trade ________ on goods and a trade _________ on services.

A)deficit,deficit
B)surplus,surplus
C)surplus,deficit
D)deficit,surplus

Question 13

Net exports are

A)the smallest component of GDP.
B)income after taxes.
C)the largest component of GDP.
D)included in government spending.

Question 14

Congress has ratified

A)both NAFTA and GATT.
B)neither NAFTA nor GATT.
C)NAFTA,but not GATT.
D)GATT,but not NAFTA.

Question 15

Relative to the trade deficit in 1990 our current is

A)substantially less.
B)slightly less.
C)slightly higher.
D)substantially higher .

Question 16

Net exports is a negative number whenever

A)a nation's exports of goods and services exceed its imports.
B)a nation's imports of goods and services exceed its exports.
C)the nation's gross investment is on the decline.
D)the nation's gross savings rate is on the decline.

Question 17

Until 2004,the largest exporter in the world was?

A)Japan
B)Germany
C)United States
D)China

Question 18

Statement I: Most economists support the concept of free trade.
Statement II: The NAFTA and GATT agreements placed substantial barriers in the way of free trade.

A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question 19

Which is the most accurate statement?

A)Our trade deficit has narrowed since 1995.
B)We export more merchandise than services (in terms of dollars).
C)The largest service purchase that foreigners make from the U.S.is educational services.
D)In recent years foreigners have generally refused to accept U.S.dollars in payment for their goods and services.

Question 20

Between 2005 and 2007 our trade averaged ___________ each year.

A)400 billion
B)-700 billion
C)250 billion
D)-500 billion

Question 21

Since the end of World War II in 1945,the world has experienced an accelerating movement toward

A)free trade.
B)an increase in trade barriers.
C)self-sufficiency in most industrial nations.
D)a breakdown of international trade.

Question 22

If total exports exceed total imports,other things being constant,then

A)net exports are negative.
B)net exports are positive.
C)GDP falls.
D)investment rises.

Question 23

Statement I: Until the mid-1970s,our imports and exports was a relatively small percentage of our domestic goods output.
Statement II: Our negative merchandise trade balance is about as large as our positive services trade balance.

A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question 24

Net exports became negative in the

A)1930s.
B)1950s.
C)1970s.
D)1990s.

Question 25

Our merchandise balance of trade has been negative since the

A)1960s
B)1970s
C)1980s
D)1990s

Question 26

If yesterday the dollar traded for 100 Japanese yen and today 101 yen for the dollar,we would say

A)that the dollar rose in value relative to the yen.
B)that the yen fell in value relative to the dollar.
C)both of the choices.

Question 27

Statement I: In 2009 the United States had a negative merchandise balance of trade over $708 billion.
Statement II: In 2009 the United States had a positive services balance of trade over $118 billion.

A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question 28

Adam Smith believed that

A)people should never buy anything if they can make it themselves.
B)what makes sense in the conduct of a private family's economic endeavors also makes sense in those of a nation.
C)trading with other nations promotes full employment.
D)a nation will gain if its citizens trade among themselves,but it will probably lose if it trades with other nations.

Question 29

Which best describes the American economy?

A)It is a highly specialized economy.
B)There is a small amount of specialization.
C)There is a great deal of self-sufficiency.
D)Half of the economy is highly specialized and the other half is self-sufficient.

Question 30

The relatively small export-import sector in the United States began to grow significantly

A)after 1900.
B)in the 1920s.
C)in the 1950s.
D)in the 1970s.
E)in the 1980s.

Question 31

The population and GDP of the European Union is ___________ that of the United States.

A)much less than
B)comparable to
C)much greater than

Question 32

In 2007,Mexico signed a trade pact with

A)Japan.
B)China.
C)the European Union.
D)Brazil and Argentina.

Question 33

Net exports is defined as

A)exports plus imports.
B)exports minus imports.
C)imports minus exports.
D)that portion of consumption and investment goods sent to other countries.

Question 34

The world's largest exporter is

A)The United States.
B)Japan.
C)Germany.
D)the United Kingdom.
E)China.

Question 35

In the treatment of American exports and imports,national income accountants

A)subtract exports,but add imports,in calculating GDP.
B)subtract both exports and imports in calculating GDP.
C)add both exports and imports in calculating GDP.
D)add exports,but subtract imports,in calculating GDP.

Question 36

Which statement is true?

A)Xn has always been positive.
B)Xn has always been negative.
C)Xn had been positive from 1900 until the 1970s.
D)Xn had been negative from 1900 until the 1970s.
E)None of these statements is truE.

Question 37

Statement I: There are growing reservations about the consequences of globalization,even among "free traders."
Statement II: Most economists support the concept of free trade.

A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question 38

If more foreign tourists visited the United States,this would

A)lower our merchandise trade imbalance.
B)lower our overall trade imbalance.
C)raise our merchandise trade imbalance.
D)raise our overall trade imbalance.

Question 39

Which component of GDP is most likely to be negative?

A)Net exports
B)Gross private domestic investment
C)Government purchases
D)Imports
E)Consumption

Question 40

From 1970 to 2000,relative to other sectors of GDP,net exports were

A)negative and large.
B)negative and small.
C)positive and large.
D)positive and small.

Question 41

The trading bloc that has eliminated all internal tariffs is

A)the European Union.
B)NAFTA.
C)Mercosur.
D)the World Trade Organization.

Question 42

Hourly wages in Mexico are ____________ those paid in the United States for comparable work.

A)equal to
B)one half
C)one quarter
D)one eighth

Question 43

Which of the following were prominent among the protesters at the WTO meetings since 1999?

A)Labor union members concerned that free trade undermined worker rights to organize.
B)Environmentalists concerned that corporations would locate in countries that had very lax environmental standards.
C)Human rights advocates concerned that free trade condoned sweatshop working conditions.
D)All of the answers are true.

Question 44

Statement I: Adam Smith believed that people should never buy anything if they can make it themselves.
Statement II: The basis for international trade is that if a nation can import a particular good or service at a lower cost than if it were produced domestically,it should trade for that good.

A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question 45

Statement I: We pay for a large part of our trade deficit with U.S.dollars.
Statement II: The United States is much more dependent on foreign trade than it was 30 years ago.

A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question 46

Which is the most accurate statement?

A)Because the American economy is much larger than any other country,we can continue running larger and larger trade deficits for as long as we like.
B)Most of the protesters at WTO meetings oppose strict environmental standards.
C)Since the passage of NAFTA our trade deficits with Mexico and Canada have increased.
D)Most economists would describe themselves as being against free trade.

Question 47

Statement I: The European Monetary Union has fewer members than the European Union.
Statement II: Mexico has become a manufacturing export platform.

A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question 48

Which statement is false?

A)If net exports were not included in GDP,that figure would be higher.
B)Between the early 1990s and 2007 our trade deficit increased substantially.
C)During the last ten years,our trade balance in services was negative.
D)After the 1970s,our trade balance has been negative.

Question 49

Modern,highly productive economies

A)have virtually no specialization.
B)have a small degree of specialization.
C)have a substantial degree of specialization.
D)have a high degree of specialization.

Question 50

Two characteristics of a modern economy are

A)barter and self-sufficiency.
B)specialization and exchange.
C)a low standard of living a high poverty rate.
D)self-sufficient workers and very little international trade.

Question 51

In 2009,________ became the world's largest exporter.

A)Germany
B)China
C)Japan
D)Russia

Question 52

Which statement is true?

A)A country like Japan would go to the World Bank to borrow currency to stabilize the yen.
B)The WTO has a Dispute Settlement Body to handle trade disagreements among member nations.
C)GATT was established at the end of the Great Depression.
D)The IMF was set up to aid developing countries build infrastructure.

Question 53

Statement I: Canada is our most important trading partner.
Statement II: In 1999,11 EU countries formed the European Monetary Union.

A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question 54

Statement I: Germany is the world's largest exporter.
Statement II: International trade is more important to the Dutch (Netherlands)economy than it is to the U.S.economy,even though we are the world's largest exporter.

A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question 55

Statement I: In modern economies,virtually everyone specializes.
Statement II: A family that tries to be self-sufficient will have a relatively low standard of living.

A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question 56

Mexico sends the United States over ______ percent of its exports.

A)20
B)40
C)60
D)80

Question 57

Statement I: GATT regulates world trade.
Statement II: The basis for international trade is that a nation stands to gain more if it can sell more to other nations than it buys from them.

A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question 58

Which statement is true?

A)Since the early 1990s the U.S.trade deficit has risen every year.
B)Net exports has always been positive.
C)The U.S.exports more services than merchandise (in terms of dollars).
D)The U.S.balance of trade was positive for most of the 20^th century.

Question 59

Statement I: The International Monetary Fund (IMF)was set up as a lender of last resort to discourage member nations from devaluating their currency.
Statement II: The World Bank was created in the same year as the IMF for the purpose of making long-term,low-interest loans to developing countries,mainly to build highways,bridges,dams,power generators,and water supply systems.

A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question 60

The NAFTA agreement

A)was supported by most economists and people in the business community.
B)has NOT led to the loss of millions of U.S.jobs to Mexico.
C)has less economic integration than the European Union.
D)did not eliminate all internal tariffs among its three members.
E)All of the answers are truE.

Question 61

Adam Smith believed all of the following EXCEPT

A)never attempt to make at home what it will cost more to make than to buy.
B)what makes sense in the conduct of a private family's economic endeavors also makes sense in those of a nation.
C)a nation will gain if its citizens trade among themselves,but it will probably lose if it trades with other nations.
D)specialization and exchange benefited both individuals and nations.

Question 62

If U.S.exports of goods and services exceed imports

A)GDP in the United States will be less than the sum of consumption,investment,and government purchases.
B)GDP in the United States will exceed the sum of consumption,investment,and government purchases.
C)net exports for the United States equals gross investment.
D)net exports for the United States equals gross savings.

Question 63

The basis for international trade is

A)that a nation can import a particular good or service at a lower cost than if it were produced domestically.
B)Specialization.
C)both countries can gain from trade.
D)All of the choices are true.

Question 64

Net exports is a positive number whenever

A)a nation's exports of goods and services exceed its imports.
B)a nation's imports of goods and services exceed its exports.
C)the nation's gross investment is positive.
D)the nation's gross savings rate is positive.

Question 65

Statement I: We could not have a modern,highly productive economy without specialization and trade.
Statement II: In modern economies,virtually everyone is a jack-of-all-trades.

A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question 66

Statement I: The most potent argument against globalization is that workers in poorer countries are exploited to produce goods that are shipped to relatively rich countries.
Statement II: Most economists are against globalization.

A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question 67

All modern economies depend on

A)the exploitation of workers
B)government ownership of the means of production
C)free-enterprise
D)specialization

Question 68

Statement I: There have been a series of demonstrations,beginning in Seattle in 1999,in favor of the policies of the WTO and the IMF.
Statement II: Globalization has helped almost everyone and hurt almost no one.

A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question 69

Specialization and exchange

A)creates benefits for both individuals and nations.
B)does NOT particularly benefit either individuals or nations.
C)can benefit individuals but not nations.
D)can benefit nations but not individuals.

Question 70

All modern economies

A)depend on self-sufficient workers.
B)depend on workers who have acquired a wide variety of skills ("jacks of all trades").
C)depend on workers with a high degree of specialized skills.
D)depend on workers who can build their own tools.

Question 71

Statement I: U.S.self-sufficiency in food production and its huge manufacturing base were important factors in winning World War I and II.
Statement II: The relatively small U.S.export-import sector of its economy began to grow significantly in the 1970s.

A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question 72

Net exports

A)are the smallest component of GDP.
B)equal exports minus imports.
C)have been negative in the United States since the mid-1970s.
D)All of the choices are true of net exports.

Question 73

Which was NOT an argument of the protesters against the IMF,WTO,and the World Bank?

A)We are exploiting factory workers in poor countries.
B)Our subsidized grain exports sold below cost in poor countries,driving local farmers out of business.
C)Globalization is hurting the American standard of living.
D)Globalization is lowering American wages and exporting high paying jobs.

Question 74

The basis for international trade is

A)self-sufficiency.
B)that we stand to gain if we can sell more to other nations than they buy from us.
C)maximizing your exports and minimizing your imports.
D)None of the choices are true.

Question 75

Which statement is TRUE,according to economist Joseph Stiglitz?

A)IMF policies are sensitive to the human suffering its policies could create.
B)The IMF takes a "hands off" approach as to how a country uses the money it is lent.
C)The IMF was founded on the belief that there was a need for international pressure for countries to have expansionary economic policies.
D)The IMF was founded on the belief that there was a need for international pressure for countries to cut deficits,raise taxes and interest rates.

Question 76

According to Nobel Prize winning economist Joseph Stiglitz

A)over the years the IMF has markedly changed.
B)the IMF was founded on the belief that markets often worked badly.
C)the IMF now champions the free market as the best way to run an economy.
D)All of the choices are true.

Question 77

Statement I: A society in which everyone is self-sufficient will generally have a higher standard of living than one in which everyone specializes in a particular type of work.
Statement II: People can specialize only if there is a well-developed system of exchange.

A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question 78

Statement I: Until the mid-1970s,U.S.exports and imports were less than 1 percent of our domestic output.
Statement II: America was called the "arsenal of democracy" because of the vast quantity of armaments we sent to our allies during World War II.

A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question 79

The main criticism Joseph Stiglitz levels at the IMF is that

A)it provides too many loans that are not repaid.
B)it no longer promotes economic growth,but rather contraction.
C)it does not provide enough loans.
D)it does not sufficiently promote the market system.

Question 80

A characteristic of a modern economy is

A)self-sufficiency.
B)specialization and exchange.
C)a high percentage of people who make their living as jacks-of-all-trades.
D)a high proportion of people employed in agriculture.