Question 1

The ratio of a country's exports to its total output (GNP or GDP)

Accepted Answer

A)   is known as the index of openness.
B)   provides a rough measure of the importance of international trade to that economy.
C)   if calculated for the United States would be quite low.
D)   All of the above. D

Question 2

A country's index of openness can never exceed 100 in value.

Accepted Answer

A) True 
 B)False  False

Question 3

Barriers to trade

Accepted Answer

A)   include government policies such as tariffs and quotas.
B)   have been falling with technological improvements in transportation and communication.
C)   have risen since World War II as many countries have imposed higher tariffs.
D)   Two of the above are true. D

Question 4

Demand for oil around the world tends to be very inelastic.

Accepted Answer

A) True 
 B)False

Question 5

The United States tends to export

Accepted Answer

A)   only a narrow range of products such as wheat.
B)   a wide set of products, primarily manufactured goods.
C)   very little.
D)   None of the above.

Question 6

Travel services include purchases of items by residents of one country when they travel to another country.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements is false?

Accepted Answer

A)   Between 1980 and 2006, the index of openness has risen for most countries.
B)   Since 1950, international trade has been growing faster than the growth of world output.
C)   A country cannot be a leading world exporter without a high index of openness.
D)   Two of the above are true.

Question 8

Which of the following statements is true?

Accepted Answer

A)   Countries tend to trade extensively with their neighbors.
B)   The United States is an important trading partner for many countries.
C)   The largest amount of international trade occurs between industrialized countries.
D)   All of the above are true.

Question 9

International trade

Accepted Answer

A)   accounts for more than 90 percent of world economic activity.
B)   is a relatively small (about 30 percent of world output)  but growing part of world economic activity.
C)   has been growing at about the same rate as the world economy.
D)   Both A and C.

Question 10

The most commonly traded product (by value) in recent years has been

Accepted Answer

A)   automobiles.
B)   wheat.
C)   televisions, stereos, and VCRs.
D)   steel.

Question 11

A country's GNP is always larger than its GDP.

Accepted Answer

A) True 
 B)False

Question 12

In the last 20 years, all of the countries in Africa have experienced positive economic growth.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements about the United States was true as of 2007?

Accepted Answer

A)   It was the world's largest exporter.
B)   It had the world's largest deficit in its current account.
C)   It had the world's largest surplus in its current account.
D)   None of the above are true.

Question 14

Most of world trade is in the form of manufactured consumer goods such as TVs, stereos, VCRs, and running shoes.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following countries has experienced negative economic growth in the last 20 years?

Accepted Answer

A)   Zimbabwe.
B)   Chad.
C)   The United States.
D)   China.

Question 16

Countries have trade surpluses when they export more than they import.

Accepted Answer

A) True 
 B)False

Question 17

Has world trade increased continually over the 60 years?

Accepted Answer

The answer of Has world trade increased continually over the...

Question 18

As measured by the index of openness, the United States is relatively closed, and yet, it was the world's largest exporter in 2007.

Accepted Answer

A) True 
 B)False

Question 19

If a country is industrialized then prolonged periods of negative growth in GNP per capita should not be a cause for concern.

Accepted Answer

A) True 
 B)False

Question 20

Between 1980 and 2006, virtually all countries have become more open.

Accepted Answer

A) True 
 B)False

Exam 1: An Introduction to International Trade

The ratio of a country's exports to its total output (GNP or GDP)

A country's index of openness can never exceed 100 in value.

Barriers to trade

Demand for oil around the world tends to be very inelastic.

The United States tends to export

Travel services include purchases of items by residents of one country when they travel to another country.

Which of the following statements is false?

Which of the following statements is true?

International trade

The most commonly traded product (by value) in recent years has been

A country's GNP is always larger than its GDP.

In the last 20 years, all of the countries in Africa have experienced positive economic growth.

Which of the following statements about the United States was true as of 2007?

Most of world trade is in the form of manufactured consumer goods such as TVs, stereos, VCRs, and running shoes.

Which of the following countries has experienced negative economic growth in the last 20 years?

Countries have trade surpluses when they export more than they import.

Has world trade increased continually over the 60 years?

As measured by the index of openness, the United States is relatively closed, and yet, it was the world's largest exporter in 2007.

If a country is industrialized then prolonged periods of negative growth in GNP per capita should not be a cause for concern.

Between 1980 and 2006, virtually all countries have become more open.