Deck 1: Introduction: An Overview of the World Economy

Question 1

The discipline of economics can be divided into:

A) microeconomics and macroeconomics.
B) stocks and flows.
C) merchandise and services.
D) unlimited wants and limited resources.
E) exports and imports.

Answer 1

microeconomics and macroeconomics.

Question 2

The study of microeconomics focuses on the:

A) interaction of international trade and domestic production of goods and services.
B) operation of the entire economy.
C) role of the banking system in the economy.
D) structure and performance of particular industries and markets.
E) GDP of a country.

Answer 2

structure and performance of particular industries and markets.

Question 3

International economics is a blend of:

A) microeconomics and sociology.
B) macroeconomics and medicine.
C) regional economics and macroeconomics.
D) microeconomics and macroeconomics.
E) trade and GDP.

Answer 3

microeconomics and macroeconomics.

Question 4

The majority of economic activity is:

A) international activity.
B) domestic activity.
C) trade block activity.
D) internationalization.
E) government spending.

Question 5

GDP has several major exclusions, including:

A) economic activity that does not occur in a market.
B) items resold during the period.
C) legally sold items that are non-taxable.
D) illegal activity.
E) all of the above.

Question 6

GDP for a country excludes which of the following?

A) Consumption by the public
B) Imports and exports
C) Illegal economic activities
D) Investment spending by businesses
E) none of the above

Question 7

GDP is:

A) the sum of the amounts of goods and services in the economy.
B) a measure of the amount of capital in an economy.
C) a measure of per capita economic growth of the economy.
D) a monetary measure of final output produced during a given period of time.

Question 8

The size of the world economy is approximately:

A) $15 trillion.
B) $20 trillion.
C) $32 trillion.
D) $45 trillion.
E) $73 trillion.

Question 9

The total GDP of the world economy is approximately:

A) $10 trillion.
B) $15 trillion.
C) $32 trillion.
D) $45 trillion.
E) $86 trillion.

Question 10

The average GDP per capita in the low-income economies is approximately:

A) $602.
B) $635.
C) $812.
D) $3,200.
E) $2,140.

Question 11

The average GDP per capita in the middle-income economies is approximately:

A) $360.
B) $1,123.
C) $2,782.
D) $5,483.
E) $8,672.

Question 12

The average GDP per capita in the high-income economies is approximately:

A) $5,642.
B) $10,000.
C) $15,000.
D) $34,316.
E) $44,717.

Question 13

The high-income economies account for about:

A) 40% of world output.
B) 55% of world output.
C) 60% of world output.
D) 63% of world output.
E) 78% of world output.

Question 14

The low-income economies account for approximately what percentage of world output?

A) 1%
B) 3%
C) 10%
D) 15%
E) 25%

Question 15

Approximately 63% of the world's economic output is produced by:

A) low-income countries.
B) middle-income countries.
C) high-income countries.
D) low- and middle-income countries.
E) Latin America.

Question 16

The high-income economies account for approximately what percentage of world output?

A) 16%
B) 40%
C) 50%
D) 63%
E) 78%

Question 17

Which of the following is a multilateral institution that makes loans to developing countries?

A) The OECD
B) The World Bank
C) The WTO
D) The INA
E) The GATT

Question 18

Imports are:

A) the part of domestic consumption from foreign producers.
B) the part of domestic production sold to foreigners.
C) the part of domestic investment that is purchased by foreigners.
D) the part of manufactured goods purchased by foreigners.
E) none of the above

Question 19

Total world imports and exports of merchandise are each a little over:

A) $556 billion.
B) $1 trillion.
C) $10 trillion.
D) $19 trillion.
E) $22 trillion.

Question 20

Total imports of merchandise in the world economy are approximately:

A) $700 billion.
B) $1 trillion.
C) $2.2 trillion.
D) $10 trillion.
E) $19 trillion.

Question 21

The total amount of merchandise exports in the world economy is approximately:

A) $220 billion.
B) $890 billion.
C) $1 trillion.
D) $20 trillion.
E) $18 trillion.

Question 22

The middle-income economies account for about:

A) 5% of world imports.
B) 10% of world exports.
C) 12% of world imports.
D) 27% of world exports.
E) 30% of world imports.

Question 23

The high-income economies account for approximately what percentage of world exports?

A) 15%
B) 20%
C) 40%
D) 71%

Question 24

The high-income economies account for approximately what percentage of world imports and exports of merchandise?

A) 10%
B) 25%
C) 30%
D) 67%
E) 74%

Question 25

The GDP of the U.S. is approximately:

A) $12.4 trillion.
B) $14.6 trillion.
C) $17 trillion.
D) $20.5 trillion.
E) $32 trillion.

Question 26

The largest economy of the world is:

A) China.
B) Japan.
C) Germany.
D) the UK
E) none of the above

Question 27

Which of the following is the world's largest economy?

A) Japan
B) Germany
C) U.S.
D) China
E) the UK

Question 28

The U.S. state with the highest Gross State Product (GSP) is:

A) New York.
B) Texas.
C) Florida.
D) California.
E) Florida

Question 29

Trade in services is less 'visible' than trade in merchandise because:

A) the value of services is more difficult to measure.
B) services lower valuation makes them less important and thus less visible.
C) the study of services is older and needs to be studied less.
D) services are such a small percentage of GDP.
E) Service imports cannot be counted accurately.

Question 30

The total amount of world exports of services is approximately:

A) $300 million.
B) $500 million.
C) $3 billion.
D) $1.5 trillion.
E) $6 trillion.

Question 31

Total imports of services in the world economy are approximately:

A) $500 million.
B) $1 billion.
C) $500 billion.
D) $2.3 trillion.
E) $5 trillion.

Question 32

A British firm building a facility in Tokyo to produce cars is engaging in:

A) portfolio capital.
B) foreign direct investment.
C) indirect foreign investment.
D) autarky.
E) none of the above

Question 33

Foreign Direct Investment (FDI):

A) is the same as a movement of portfolio capital.
B) usually does not involve the participation of MNCs.
C) usually involves a MNC investing in plant and equipment in a foreign country.
D) is illegal in high-income countries.
E) is illegal in middle-income countries.

Question 34

The daily volume of trading in the foreign exchange market is:

A) $75 million.
B) $100 million.
C) $500 billion.
D) $2 trillion.
E) $5 trillion

Question 35

The economies in which country group are growing the fastest?

A) Low-income
B) High-income
C) Middle-income
D) Latin America
E) none of the above

Question 36

The population in which country group is growing the slowest?

A) Low-income
B) High-income
C) Middle-income
D) Asia
E) None of the above

Question 37

From 2000 - 2012 which group of countries grew the fastest?

A) Low-income countries
B) Middle-income countries
C) High-income countries
D) Low, middle and high-income countries grew at the same rate
E) Some of the high-income countries

Question 38

Which of the following time periods was one of unusually rapid growth in the world economy?

A) 1850-1914
B) 1914-1945
C) 1929-1939
D) 1914-1920
E) 1936-1940

Question 39

Which of the following statements is false?

A) The world economy grew at a fast rate between 1850 and 1914.
B) The world economy grew at a slow rate between 1915 and 1945.
C) The world economy grew at a fast rate between 1946 and 1973.
D) The world economy has been growing at a fast rate since 1973.
E) none of the above

Question 40

Which of the following terms refers to the increasing importance of international trade and investment either for a country or the world economy?

A) Comparative advantage
B) FDI
C) Globalization
D) Commercial policy
E) international collaboration.

Question 41

Economics can be divided into microeconomics and international economics.

Question 42

Microeconomics deals with operation of the overall economy such as consumption, investment, and government spending.

Question 43

International economics is a blend of macroeconomics and regional economics.

Question 44

The study of international trade is completely unrelated to the principles of microeconomics.

Question 45

The study of microeconomics has nothing to do with the study of international economics.

Question 46

There are no institutional differences between domestic trade and international trade.

Question 47

Changes in U.S. macroeconomic policy may influence economies in the rest of the world.

Question 48

Changes in foreign economic conditions never have any noticeable impact on the U.S. economy.

Question 49

Most economic activity in the world is domestic economic activity.

Question 50

Imports and exports are much more important than purely domestic economic activity.

Question 51

International trade is much more important than domestic economic activities such as consumption by the public or investment.

Question 52

We account for non-market and non-reported activities in the world economy by making a reasonable guess of their size and adding them to the official GDP statistics.

Question 53

The economic output of the world is evenly distributed among the different countries of the world.

Question 54

The value of the world economy's output as measured by GDP is approximately $70 trillion.

Question 55

There is a strong relationship between the distribution of world production and the distribution of world income.

Question 56

Average GDP per capita in low-income economies is approximately $812.

Question 57

The high-income economies account for approximately 90 percent of total world output.

Question 58

The output of the world economy is approximately $32 trillion.

Question 59

GDP per capita in middle-income economies is a little over $2,700 per year.

Question 60

The total GDP of the low-income economies is a little over $1 trillion.

Question 61

GDP per capita levels provide one possible measure of a country's standard of living.

Question 62

Merchandise trade includes international trade in goods and services.

Question 63

Imports are that part of domestic production sold to foreign countries.

Question 64

Imports and exports of merchandise are each about 5% of world economic output.

Question 65

The total value of exports in the world economy usually is larger than the total value of imports because the former is counted more carefully than the latter.

Question 66

World exports and imports are about 24% of world output, respectively.

Question 67

Nearly 70% of world imports and exports are accounted for by the high-income economies.

Question 68

The middle-income economies account for most of world imports and exports because they have most of the world's income and production.

Question 69

A simultaneous drop in GDP in the U.S., Germany, and Japan would reduce the probability of a global recession.

Question 70

China is the world's largest economy based on total output.

Question 71

The Japanese economy is roughly half the size of the U.S. economy.

Question 72

The U.S. is currently the world's second largest economy after Japan.

Question 73

GDP per capita in the high-income economies is approximately $45,000.

Question 74

The largest economy in the EU is France.

Question 75

The U.S. is the world's largest trading nation.

Question 76

Gross State Product refers to the economic output of a state in the U.S.

Question 77

International trade in services is more important than international trade in goods.

Question 78

As GDP per capita increases, the percentage of total economic activity allocated to services tends to decrease.

Question 79

Tourism is an example of international trade in services.

Question 80

International trade in services is easier to measure than international trade in goods.