Deck 1: Introduction to the Global Economy

Question 1

When interest rates increase in the United States,capital flows from abroad will:

A)increase
B)decrease
C)no change
D)not be available anymore

Answer 1

A

Question 2

The total value of all goods and services produced within a nation's borders is called:

A)GDP
B)net exports
C)current account balance
D)GNP

Answer 2

A

Question 3

Which of the following is not a sign of globalization?

A)the increased availability of a variety of goods in the market
B)the opportunity to invest in financial assets worldwide
C)promotion of "Buy American" ideology everywhere
D)being able to talk to anybody across the world over telephone

Answer 3

C

Question 4

The study of foreign exchange markets,the balance of payments,and adjustment to balance-of-payments disequilibria is:

A)Open-economy macroeconomics
B)International finance
C)Both A and B
D)none of the above

Question 5

The economic interdependence among nations has ___________ in the recent past.

A)decreased
B)remained the same
C)increased
D)hurt the world

Question 6

The ratio between a country's imports and exports of goods or services to their gross domestic product (GDP)is a measure of that country's:

A)microeconomics
B)openness as an economy
C)macroeconomics
D)economic interdependence

Question 7

An inflow of capital funds to the United States tends to increase the international value of the dollar,stimulating ____________ and discouraging ________________.

A)US exports,US imports
B)US imports,economic activity abroad
C)US economic activity,economic activity abroad
D)US imports,US exports

Question 8

What are the microeconomic aspects of international economies?

A)Balance of payments issues
B)International trade theory and polices
C)Adjustments in the balance of payments
D)GDP

Question 9

In many developing nations,_________ provide employment opportunities and ____________ to pay for the many products that cannot be produced in the home country.

A)imports,earnings
B)exports,earnings
C)exports,outputs
D)imports,outputs

Question 10

A summary statement of all the international transactions of the residents of a nation with the rest of the world during a particular period of time is called:

A)Balance of payments
B)Net exports
C)GNP
D)GDP

Question 11

The open-economy macroeconomic processes for correcting balance-of-payments disequilibria are collectively called :

A)discretionary fiscal policy
B)foreign exchange market
C)monetary policy
D)adjustment in the balance of payments

Question 12

International trade theory and policies as they relate to individual nations are the _____________________ aspects of international economics.

A)International finance
B)microeconomic
C)national income accounting
D)macroeconomic

Question 13

In 2001,the world GDP ______________,while the world trade level ____________ by 1 percent.

A)decreased,increased
B)increased,decreased
C)decreased,decreased
D)increased,increased

Question 14

The framework for the exchange of one national currency for another is:

A)the central bank
B)the foreign exchange market
C)the bond market
D)the World Trade Organization

Question 15

_____________ has grown at a faster rate than ______________,indicating an increase in economic interdependence among nations.

A)World trade,world production
B)US GDP,world GDP
C)World production,world trade
D)Output in the US,incomes in the US

Question 16

Which of the following examines the reasons for and effects of trade restrictions?

A)Balance of payments
B)Foreign exchange market
C)International trade policy
D)International trade theory

Question 17

Which of the following analyzes the basis for and gains from trade?

A)Balance of payments
B)Foreign exchange market
C)International trade policy
D)International trade theory

Question 18

The study of the whole economy,such as the total receipts and payments of a nation and the general price index,is considered to be a:

A)microeconomic application
B)macroeconomic application
C)both micro and macroeconomic application
D)foreign exchange application

Question 19

The economic relationship and integration among nations is defined as:

A)microeconomics
B)economic interdependence
C)macroeconomics
D)open economies

Question 20

Which of the following is most restricted to flow across national boundaries?

A)People
B)Capital Flows
C)Financial and Portfolio Investment
D)Foreign Direct Investment

Question 21

The persistence of ________________ in exchange rates has led the international community to call for reforms of the current international monetary system.

A)excessive volatility and disequilibria
B)long run stability
C)arbitrage opportunities
D)equilibrium

Question 22

Trade restrictions usually benefit a large majority of the ___________ in the nation at the expense of a silent majority of _________________.

A)consumers,producers
B)producers,consumers
C)importers,exporters
D)exporters,importers

Question 23

With respect to international trade in the real world:

A)most nations impose some restrictions limiting the free flow of goods.
B)most nations have eliminated all barriers to free trade.
C)most nations have a completely closed economy.
D)None of the above

Question 24

A nation that has an open economy:

A)allows private ownership of capital
B)has flexible exchange rates
C)has fixed exchange rates
D)trades with other nations

Question 25

Which of the following Geneva based international organization sets the rules of trade between nations,implements new trade agreements and settles trade disputes between member countries

A)World Trade Organization (WTO)
B)World Bank (IBDR)
C)International Monetary Fund (IMF)
D)United Nations (UN)

Question 26

During the last decade,almost _______ of Europe's unemployed were jobless longer than one year.

A)one out of ten
B)all
C)none
D)half

Question 27

The loose organization that blames globalization for many human and environmental problems throughout the world is:

A)The World Trade Organization
B)The World Bank
C)the protectionist movement
D)the anti-globalization movement

Question 28

During the last decade,almost _______ of United States' unemployed were jobless longer than one year.

A)11%
B)30%
C)45%
D)55%

Question 29

Though each nation's economic collapse in the 1990s was different,most were precipitated by a massive and sudden _________________.

A)inflow of short-term capital
B)withdrawal of short-term capital
C)inflow of illegal immigrants
D)volatility of short-term interest rates

Question 30

Rapid technological changes and increased competition from the manufactured exports of emerging market economies are causing _________________ in the United States.

A)downsizing and job insecurity
B)industrial growth and job security
C)increased wages in competing industries
D)exchange rate fluctuations

Question 31

_______________ has/have led to sluggish growth in Europe.

A)Free trade
B)Overregulation
C)Job insecurity
D)Excessive fluctuations in exchange rates

Question 32

_____________ in the United States attracts funds from other nations.

A)An increase in net exports
B)A decrease in interest rates
C)An increase in the inflation rate
D)An increase in interest rates

Question 33

The increasing integration of economies around the world,particularly through trade and financial flows,is:

A)outsourcing
B)macroeconomics
C)globalization
D)autarky

Question 34

In the last decade,the United States averaged a _______ percent unemployment rate

A)15
B)20
C)Less than 5
D)10

Question 35

Slow growth in what two regions has led to calls for trade protectionism and dampened the growth of the entire world economy?

A)US and South America
B)Japan and Europe
C)US and Europe
D)Japan and South America

Question 36

Structural unemployment in Europe is most likely due to:

A)Trade protectionism
B)rigidities and inflexibility in the labor markets
C)excessive fluctuations in exchange rates
D)the national minimum wage

Question 37

The most effective trade policy would be _______________,which allows each nation to specialize in efficient production of commodities.

A)free trade
B)protectionism
C)a closed economy
D)restricted trade

Question 38

In the last decade,Western Europe averaged a _______ percent unemployment rate.

A)15
B)20
C)5
D)10

Question 39

The field of international economics:

A)is a relatively new branch of economic study
B)includes contributions from distinguished economists like Adam Smith,David Ricardo and Alfred Marshall
C)includes macroeconomics,but not microeconomics,issues.
D)includes microeconomics,but not macroeconomics,issues.

Question 40

Globalization ____________:

A)Is inevitable in a world with converging tastes for consumer goods.
B)increases efficiency
C)is often blamed for increasing inequalities in income distribution in the world.
D)All of the above

Question 41

Trade protectionism in industrial countries is one of the primary problems/issues faced by international economists and policymakers in today's economically interdependent world.Explain.

Question 42

Why is International Trade Theory and Policy considered as Microeconomic aspect of International Economics and International Finance is considered as the Macroeconomic aspect of International Finance?

Question 43

Even though trade is important for both large and small countries it is much more important for a smaller country than a larger one.Explain.

Question 44

International economic relationships are similar enough to interregional economic relations that the same tools of economic analysis can be used for both.

Question 45

Globalization is inevitable because consumers around the world are demanding different types of commodities.

Question 46

Free trade restricts a nation's ability to specialize in specific commodities that may allow for more efficient use of resources.

Question 47

Roughly one-sixth of the world's population lives on less than $1 a day

Question 48

National and regional problems can quickly become global problems in an interdependent world.

Question 49

Reform policies are being developed in struggling economies to prevent further economic collapses.

Question 50

The anti-globalization movement believes globalization benefits corporations and multinationals at the expense of human and environmental well-being.

Question 51

Exchange rates can remain in disequilibria for long periods of time.

Question 52

Globalization is the study of the aggregate economy.