Deck 1: An Introduction to International Trade

Question 1

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

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

Answer 1

A

Question 2

Which of the following statements is true?

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.

Answer 2

D

Question 3

Which of the following statements is false?

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.

Answer 3

C

Question 4

International trade

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 5

Which of the following is true?

A) Much of the trade of the European Union (EU) countries is with EU countries.
B) Industrialized countries tend to trade relatively little and largely with developing countries.
C) Developing countries in Africa and South America tend to trade the most and largely with themselves.
D) All of the above are true.

Question 6

Which of the following statements is false?

A) Richer countries tend to be found in North America, Western Europe, and Japan.
B) Countries with large populations tend to be rich.
C) Growth of per capita GNP tends to be quite stable about 1.5-3 percent per year in industrialized countries.
D) Over the past several decades, growth of per capita GNP tends to be higher on average in industrialized countries than in low or middle-income countries.

Question 7

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

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.

Question 8

Growth in per capita GNP in developing countries has tended to be much more variable in recent years than per capita GNP growth rates in industrialized countries.

Question 9

Japanese exports are heavily concentrated in

A) agricultural products such as rice.
B) natural resource products such as coal.
C) manufactured products including motor vehicles.
D) Both A and C.

Question 10

In the last 20 years, which of the following countries has experienced positive economic growth?

A) Russia.
B) Zimbabwe.
C) Haiti.
D) All of the above have seen their economies decline during this period.

Question 11

The difference between a country's Gross National Product (GNP) and its Gross Domestic product (GDP) is that

A) GNP refers to production within the nation while GDP refers to production by domestic factors no matter where they are located.
B) GNP is always bigger than GDP.
C) GDP refers to production within the nation while GNP refers to production by domestic factors no matter where they are located.
D) Two of the above are true.

Question 12

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

Question 13

Per capita GNP is defined as a country's GNP divided by its

A) population.
B) labor force.
C) capitalists.
D) None of the above.

Question 14

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

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

Question 15

Countries of the world differ in terms of their

A) geographic size.
B) population size.
C) standards of living.
D) All of the above.

Question 16

Barriers to trade

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.

Question 17

The types of goods Japan exports and imports appear to be well explained by

A) Japanese endowments of factors of production (e.g. land, labor, capital, natural resources).
B) high and rising Japanese tariffs.
C) advertising and other sales promotion efforts.
D) All of the above.

Question 18

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

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 19

The United States tends to export

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 20

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

Question 21

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

Question 22

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

Question 23

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

Question 24

Large countries tend to be more open than small countries.

Question 25

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

Question 26

As of 2007, the United States is the world's largest importer.

Question 27

Has world trade increased continually over the 60 years?

Question 28

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

Question 29

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

Question 30

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

Question 31

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