Suppose exports = $1.5 trillion, imports = $2 trillion, and GDP = $10 trillion.
ID: 1140857 • Letter: S
Question
Suppose exports = $1.5 trillion, imports = $2 trillion, and GDP = $10 trillion. In this case, net exports equals
+ $3.5 trillion
+ $0.5 trillion
- $0.5 trillion
- $3.5 trillion
A trade embargo
denotes to a refusal to export goods to a country
refers to an export subsidy to increase exports
refers to the effect of exchange rates on trade
Consists of trade barriers to increase exports
If countries abide by international trade laws and treaties, then . . .
International trade will decline
This is often referred to as fair trade
All trade barriers will disappear
All countries will enjoy trade surpluses
If countries abide by international trade laws and treaties, then . . .
International trade will decline
This is often referred to as fair trade
All trade barriers will disappear
All countries will enjoy trade surpluses
A decrease in the tariff rate will cause:
No change in the amount of imports
An increase in imports and a lower price for imports
An increase in import prices
A decline in the amount of imports
According to comparative advantage, income will rise in the industry …
Based on the abundant resource
That competes with exports
That is least profitable
Based on the scarce resource
The product life cycle refers to which of the following?
The phases of a product's success over time such as introduction, growth, maturity, etc.
The impact of quotas on the amount of exports
The adverse impact of international trade on the natural environment
The influence of trade openness on import prices
Which of the following denotes a fixed-dollar-amount tax for each unit of an imported product?
Specific tariff
Ad valorem tariff
quota
Compound tariff
The use of economic trade sanctions:
are intended to punish enemy nations to force them to change
Are set up to shrink international trade barriers
are designed to promote export industries
Consist of tariff policies to expand exports
Suppose that the United States increases a tariff on furniture imports, causing foreign-produced furniture to exit the U.S. market. Furniture prices to U.S. consumers would be expected to:
Go up
Decline, and the amount of imports would rise
Stay about the same
Decrease, and the amount of imports would decrease
A lower tariff on imported food would most likely benefit …
consumers of food
Domestic farmers and ranchers
The government
Commercial banks
Which of the following is a possible beneficial effect of globalism?
destruction of the natural environment
Greater variety of products
world economy in recession
Trade war
According to comparative advantage, specialization and trade causes a nation's total consumption:
To equal the level of exports
To decline
To increase
To remain constant
A trade war refers to which of the following?
Military confrontation caused by economic disagreements among nations
The effects of comparative advantage upon business firms and consumers
Increasing trade barriers among countries as an attempt to protect jobs
Increasing trade among nations because of higher transportation costs
Comparative advantage in international trade is based on:
The most expensive resource in a nation
Trade barriers between countries
Specialization in exporting the good based on the relatively most productive resource in a country
Government taxes upon exports
Trade openness provides a measure of . . .
Tariff rates
The amount of trade in relation to the exchange rate
The amount of trade in comparison to the size of the economy
Domestic investment that takes place
Which concept of comparative advantage suggests that wages/salaries should equalize across similar countries?
Product price equalization
Factor price equalization
Exchange rate equalization
Trade openness
The effect of outsourcing refers to which statement?
The country increases exports to other nations
American companies produce manufactured goods in Vietnam
The use of tariffs to reduce imports
Globalism causes prices to increase
In recent years, which statement is descriptive of U.S. net exports?
Trade surplus
Imports equal exports
Imports greater than exports
Total imports are less than total exports
Which of the following indicates a trade deficit?
Exports equal imports
Exports are greater than imports
The volume of imports is zero
The trade balance is a negative amount
An increase in the average price of imports while the average price of exports stays the same will cause:
an increase in the terms of trade
a decrease in the terms of trade
An increase in imports
A worsening trade deficit
Which of the following trade policies involves the use of tariffs?
Free trade
Closed economy
comparative advantage
Trade barriers
The perspective of structuralism suggests that:
free trade benefits both rich countries and poor countries
international capitalism benefits rich countries more than poor countries
nations should remove all trade barriers
free trade will adversely affect consumers
The concept of economic liberalism refers to which international trade perspective?
A free and open trade system is beneficial
Capitalism causes poverty in poor countries
autarky
trade barriers such as quotas are beneficial
A country will have a comparative advantage in the good in which its:
Underlying resource is scarce
Underlying resource is most productive in the nation
Labor productivity is relatively low
Underlying resource is least productive in the country
Which of the following is an example of interindustry trade?
The U.S. and Canada both export and import wheat with each other
The U.S. exports beef to Japan, and the U.S. imports sushi from Japan
Trade deficit
autarky
The movement from a closed economy to an open economy would most likely decrease jobs in which sector?
Export-related industries
Business sectors in which there is no trade
Industries that compete with imports
No change in the amount of jobs in any industries
Suppose exports = $1.5 trillion, imports = $2 trillion, and GDP = $10 trillion. In this case, trade openness equals
15 %
35 %
20 %
10 %
Which of the following refers to a quantity restriction on imports?
Quotas
Trade dumping
free trade
Tax on imports
The concept of comparative advantage was developed by
David Ricardo
Milton Friedman
Adam Smith
Ben Franklin
Industrial Policy:
Is based on the free trade perspective
Refers to government actions to support sunrise industries
Causes lower prices of imports
Causes an expansion in imports
According to comparative advantage, specialization refers to:
Producing and exporting the product that is relatively least expensive to manufacture
The nation should focus on the good that is least productive to manufacture
Production should emphasize the good with the lowest quality
High prices should be charged to consumers
A shift to import tariffs from free trade may create more jobs in:
Industries that export goods
Industries that compete with imports
No change in the level of unemployment
industries associated with both imports and exports
Countervailing duties:
Are adopted to increase trade quotas on exported goods
is a form of comparative advantage
Are retaliatory tariffs upon unfair trade
Refer to the patriotic duty of consumers to buy American goods
Suppose two trade partners export and import the same product. This is called:
interindustry trade
factor endowment
overlapping demand
a trade sanction
Increasing trade throughout the world is caused by:
more trade barriers
higher transportation costs
Technological improvement in transportation
Higher energy costs
International trade tends to . . .
Cause businesses to become less competitive
Bring about lower prices for consumers
harm consumers
Cause the world economy to shrink in size
Assume the average price of exports = 200 and the average price of imports = 300. The terms of trade is:
0.67
1.5
200
100
Proponents of ____ suggest that the government should remove tariffs.
absolute scarcity theory
economic liberalism
Trade barriers
Trade protectionism
Which of the following is a possible harmful effect of globalism?
Loss of domestic jobs because of cheaper wages in other countries
Low prices are harmful to buyers
No international trade
Commercial technological advance
Interindustry trade …
Is a type of industrial policy
Occurs if the same kinds of goods are both exported and imported
arises if one kind of good is exported and a different type of good is imported
Takes place in an autarky economy
+ $3.5 trillion
+ $0.5 trillion
- $0.5 trillion
- $3.5 trillion
Explanation / Answer
1. C.) $ 0.5 trillion
Net exports are the value of a country's total exports minus the value of its total imports.
Net Exports = Total Exports -- Total Imports
Net Exports = $1.5 - $2 = -$0.5 trillion.
2. A.) Denotes a refusal to export goods to a country.
A trade embargo is the partial or complete prohibition of commerce and trade with a particular country, in order to isolate it.
3. & 4. B.) Often referred as fair trade
International trade laws covering all those international rules pertaining to economy transactions and relations, as well as those pertaining to governmental regulation of economic matters. includes rules on:-trade in goods services, economic development, intellectual property rights, FDI, international finance and monetary matters, commodities, food, heath etc..
5. B.) An increase in imports and a lower price for imports
Tariffs are a tax placed by the government on imports. They raise the price for consumers, lead to a decline in imports, and can lead to retaliation by other countries.Tariff decreases the price of imported goods and increase increase in Imports because imported goods will become cheaper than domestic goods.