Question 1

The annual turnover in the foreign exchange markets is about double the value of world exports of goods.

Accepted Answer

A) True 
 B)False  False

Question 2

The difference between what consumers are willing and able to pay for a particular quantity and the market price is:

Accepted Answer

A)   consumer surplus.
B)   producer surplus.
C)   global surplus.
D)   market surplus. A

Question 3

To measure the importance of global trade to an economy, economists usually divide ________ by the total volume of its domestic output.

Accepted Answer

A)   exports
B)   capital flows
C)   exports minus imports
D)   exports plus imports D

Question 4

The rate of growth of the international monetary and financial markets is rather small compared with the rate of growth of world trade in goods and services

Accepted Answer

A) True 
 B)False

Question 5

If the price of a product declines, supply increases.

Accepted Answer

A) True 
 B)False

Question 6

In spite of the financial crises of the mid-1990s through the early 2000s, capital flows to emerging economies continued to grow at impressive rates.

Accepted Answer

A) True 
 B)False

Question 7

Foreign direct investment (FDI) is the acquisition of assets that involves a long-term relationship and at least a ___ percent controlling interest in an enterprise located in another economy.

Accepted Answer

A)   1
B)   5
C)   10
D)   50

Question 8

An increase in the number of consumers in a market will decrease demand and is illustrated by a leftward shift of the demand curve.

Accepted Answer

A) True 
 B)False

Question 9

An increase in the price of an important input in the production process results in:

Accepted Answer

A)   an increase in demand and a higher price.
B)   a decrease in demand and a lower price.
C)   an increase in supply and a lower price.
D)   a decrease in supply and a higher price.

Question 10

"Economic integration" refers to the extent and strength of real-sector and financial-sector linkages among economies.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following would most likely result in a decrease in the supply of wheat?

Accepted Answer

A)   an increase in the price of bread
B)   an increase in the price of corn
C)   a decrease in consumer incomes
D)   a decrease in the price of fertilizer

Question 12

News that white tea can reduce the chance of heart disease would:

Accepted Answer

A)   increase the supply of black tea and reduce the price of black tea.
B)   decrease the supply of black tea and increase the price of black tea.
C)   increase the demand for black tea and increase the price of black tea.
D)   decrease the demand for black tea and reduce the price of black tea.

Question 13

Growth of global trade in goods and services:

Accepted Answer

A)   is quite volatile, with an equal number of periods in which it is positive or negative.
B)   is rather robust, with only a few negative growth periods.
C)   tends to outpace the growth in international monetary and financial markets.
D)   is never negative.

Question 14

Suppose there is a decrease in the global supply of coffee, resulting in an increase in the global price of coffee. All other things held constant, the likely impact on the global market coffee creamer is:

Accepted Answer

A)   a decrease in demand for creamer and a decrease in the global price of creamer.
B)   an increase in demand for creamer and an increase in the global price of creamer.
C)   a decrease in supply of creamer and an increase in the global price of creamer.
D)   an increase in supply of creamer and a decrease in the global price of creamer.

Question 15

Portfolio capital flows to emerging economies tend to be larger than flows of foreign direct investment.

Accepted Answer

A) True 
 B)False

Question 16

A positive amount by which quantity supplied exceeds quantity demanded at a given price is:

Accepted Answer

A)   consumer surplus.
B)   producer surplus.
C)   excess quantity supplied.
D)   excess quantity demanded.

Question 17

A production tax causes ______ to decrease.

Accepted Answer

A)   demand
B)   quantity demanded
C)   supply
D)   quantity supplied

Question 18

The most globalized nations tend to be the smaller advanced economies.

Accepted Answer

A) True 
 B)False

Question 19

Activities in the real sector of an economy are independent of the activities in the financial sector of an economy.

Accepted Answer

A) True 
 B)False

Question 20

There is a clear relationship between inequality of income patterns and globalization.

Accepted Answer

A) True 
 B)False

Exam 1: Understanding the Global Economy

The annual turnover in the foreign exchange markets is about double the value of world exports of goods.

The difference between what consumers are willing and able to pay for a particular quantity and the market price is:

To measure the importance of global trade to an economy, economists usually divide ________ by the total volume of its domestic output.

The rate of growth of the international monetary and financial markets is rather small compared with the rate of growth of world trade in goods and services

If the price of a product declines, supply increases.

In spite of the financial crises of the mid-1990s through the early 2000s, capital flows to emerging economies continued to grow at impressive rates.

Foreign direct investment (FDI) is the acquisition of assets that involves a long-term relationship and at least a ___ percent controlling interest in an enterprise located in another economy.

An increase in the number of consumers in a market will decrease demand and is illustrated by a leftward shift of the demand curve.

An increase in the price of an important input in the production process results in:

"Economic integration" refers to the extent and strength of real-sector and financial-sector linkages among economies.

Which of the following would most likely result in a decrease in the supply of wheat?

News that white tea can reduce the chance of heart disease would:

Growth of global trade in goods and services:

Suppose there is a decrease in the global supply of coffee, resulting in an increase in the global price of coffee. All other things held constant, the likely impact on the global market coffee creamer is:

Portfolio capital flows to emerging economies tend to be larger than flows of foreign direct investment.

A positive amount by which quantity supplied exceeds quantity demanded at a given price is:

A production tax causes ______ to decrease.

The most globalized nations tend to be the smaller advanced economies.

Activities in the real sector of an economy are independent of the activities in the financial sector of an economy.

There is a clear relationship between inequality of income patterns and globalization.