Deck 24: Globalization and International Impacts on the Economy

Question 1

In the early 1900s tariffs accounted for ____________ of all federal government revenues,whereas today they account for less than ____________ percent.

A) one-tenth;4
B) half;0.5
C) one-quarter;5
D) half;2

Answer 1

half;2

Question 2

One study from the United Kingdom (cited in the textbook)showed that almost ______ times as many firms that faced global competition reported innovations in product or process compared to firms that did not face global competition.

A) three
B) six
C) nine
D) twelve

Answer 2

three

Question 3

In 1946 the average tariff rate in the United States was around ___________ percent,while the average tariff in 2012 was about ____________ percent.

A) 14.0;2.4
B) 18.7;12.8
C) 40.0;1.8
D) 30.2;21.0

Answer 3

40.0;1.8

Question 4

Economist David Friedman has compared free international trade to

A) the Holocaust.
B) the Cold War.
C) a technology.
D) a revolution.

Question 5

Which of the following factors are repeated in many different definitions of globalization?

A) creation of a smaller world
B) movement toward a world economy
C) people living across the world from one another having a greater impact upon each other
D) all of the above

Question 6

The Cold War

A) hampered globalization because it created a political barrier between countries which reduced the likelihood that those countries would engage in trade with one another.
B) enhanced globalization because it helped to encourage countries to engage in trade with one another.
C) ended with the building of the Berlin Wall in the early 1960s.
D) a and c

Question 7

_______________ is the practice of hiring people in other countries to do a job that was once done domestically.

A) Offshoring
B) Onshoring
C) Insourcing
D) Megasourcing

Question 8

In 2000,the top 100 transnational companies produced about _____________ percent of the entire world's output.

A) 2.1
B) 4.3
C) 10.5
D) 22.1

Question 9

According to the textbook,some people refer to the period from ___________________ as the First Era of globalization.

A) the late 1700s to the late 1800s
B) the mid-1900s to the late 1980s
C) the late 1600s to the mid-1800s
D) the mid-1800s to the late 1920s

Question 10

Globalization is closely aligned with which of the following?

A) increased free enterprise
B) more government control of markets
C) less freedom of movement for people
D) less freedom of movement for goods

Question 11

Economists are fairly confident that globalization leads to a(n)_____________ standard of living based on their comparisons of countries with __________________ characteristics.

A) increased;similar
B) increased;very few similar
C) decreased;similar
D) decreased;very few similar

Question 12

Globalization

A) is the growing integration of the national economies of the world to such an extent that a single worldwide economy may be emerging.
B) is any type of foreign trade.
C) is specifically foreign trade between countries that have entered into a formal free trade agreement.
D) will necessarily lead to higher unemployment rates in the United States.

Question 13

Fifteen years ago,China _________________ with the countries of Europe.Today,China ______________________ most European countries.

A) traded a great deal;is not a trading partner with
B) traded a great deal;is rarely a trading partner for
C) did not trade much;is one of their top five trading partners for
D) did not trade much;is rarely a trading partner for

Question 14

Between 1980 and 2000,income per person in India

A) doubled.
B) tripled.
C) quadrupled.
D) decreased by 25 percent.

Question 15

In economics,the term foreign exchange trading means

A) buying and selling foreign goods.
B) buying and selling foreign services.
C) buying and selling foreign assets (such as,real estate).
D) buying and selling foreign currencies.

Question 16

North Korea has ____________ the process of globalization,while South Korea has _______________ it.A likely result of this is that South Koreans have a much ______________ standard of living than North Koreans.

A) embraced;avoided;higher
B) embraced;avoided;lower
C) avoided;embraced;lower
D) avoided;embraced;higher

Question 17

Between 1977 and 2004,the inflation-adjusted prices for an array of goods traded between countries __________ while the inflation-adjusted prices for an array of goods not traded between countries

A) fell;increased.
B) rose;increased as well.
C) fell;decreased as well.
D) rose;decreased.

Question 18

According to the text,in which of the following countries was tipping found to occur very infrequently?

A) Mexico
B) United States
C) Egypt
D) Vietnam

Question 19

Between 1940 and 2000,income per person in China

A) doubled.
B) tripled.
C) quadrupled.
D) decreased by 5 percent.

Question 20

In recent years,the Chinese government has _____________ bonds issued by the U.S.government which has _____________ interest rates in the United States beyond what they would have been otherwise.

A) bought;lowered
B) bought;raised
C) sold;lowered
D) sold;raised

Question 21

If an economy's exports are $800 billion and its imports are $750 billion,its net exports are

A) $1,550 billion
B) $50 billion
C) -$50 billion
D) 1.07.

Question 22

Some of the benefits of globalization include

A) increased international trade.
B) greater income per person.
C) lower prices for goods.
D) greater product variety.
E) all of the above

Question 23

The _____________ the size of the potential customer base for a given product (for example,music),the ______________ is the variety of goods we are likely to see.

A) larger;greater
B) smaller;smaller
C) larger;smaller
D) smaller;greater
E) a and b

Question 24

If the United States goes into a recession,this tends to shift Japan's AD curve _______________ because Japan will ___________________.

A) rightward;import less from the United States.
B) rightward;export less to the United States.
C) leftward;import less from the United States.
D) leftward;export less to the United States.

Question 25

A rise in net exports shifts the

A) AD curve leftward.
B) AD curve rightward.
C) SRAS curve leftward.
D) SRAS curve rightward.

Question 26

Which of the following is false?

A) India and China are examples of countries that have been opening up their economies to globalization.
B) Globalization will cause some people to lose jobs,but even without globalization,some people will lose jobs.
C) The end of the Cold War is one of the factors that many believe has lead to an increase in globalization.
D) Income per person has decreased in China and India in recent decades.

Question 27

If an economy's exports are $560 billion and its imports are $730 billion,its net exports are

A) $1,290 billion
B) $170 billion
C) -$170 billion
D) 1.30.

Question 28

Which of the following is false?

A) In recent years,the Chinese government has bought U.S.government bonds,raising interest rates in the United States.
B) Among the key features of globalization is the growing integration of the national economies of the world.
C) Globalization is associated with a movement toward more free enterprise.
D) It is becoming increasingly common for Americans to work for foreign companies that have offices in the United States.

Question 29

If Japan's Real GDP rises,this tends to _________________ United States exports,shifting the United States AD curve to the __________________.

A) raise;right.
B) raise;left.
C) lower;right.
D) lower;left.

Question 30

Between 1990 and 2003,college tuition went up 130 percent,which is __________ the increase in the prices of housing,gasoline,and medical care.

A) slightly more than
B) less than
C) about the same as
D) considerably more than

Question 31

Which of the following is true?

A) Economists are fairly certain that globalization leads to an increased standard of living.
B) During the 1990s,the annual percentage change in output per person was negative in globalized developing countries,but positive in less globablized countries.
C) When it comes to globalization it is generally easier to see the benefits than to see the costs.
D) The benefits of globalization are more visible than the costs,since they tend to be concentrated on a relatively smaller group of people.

Question 32

If Germany's Real GDP falls,this tends to ______________ United States exports,shifting the United States AD curve to the ________________.

A) raise;right.
B) raise;left.
C) lower;right.
D) lower;left.

Question 33

In 2000,the top 100 transnational companies produced about _____________ percent of the entire world's output,which was approximately as much as what ________________ produced that year.

A) 4.1;Japan
B) 4.3;the United Kingdom
C) 10.9;China
D) 25.1;the United States

Question 34

If Japan's Real GDP falls,this tends to _________________ United States exports,shifting the United States AD curve to the _____________________.

A) raise;right.
B) raise;left.
C) lower;right.
D) lower;left.

Question 35

Suppose a British camera has a price of 200 British pounds.To a United States camera importer,its price rises from $360 to $380.This might happen when the dollar ________________ against the British pound,which means the British pound has a __________ dollar price.

A) depreciates;higher
B) depreciates;lower
C) appreciates;higher
D) appreciates;lower

Question 36

It is often easier to see the ___________ of globalization than it is to see the _____________.This is because the costs tend to be more ________________,while the benefits tend to be

A) costs;benefits;concentrated;widely dispersed.
B) benefits;costs;concentrated;widely dispersed.
C) costs;benefits;widely dispersed;concentrated.
D) benefits;costs;widely dispersed;concentrated.

Question 37

Suppose a case of French wine has a price of 1,500 euros.To a U.S.wine importer,its price falls from $300 to $280.This could happen as a result of the dollar ___________ against the euro,which means the euro has a ____________ dollar price.

A) depreciating;higher
B) depreciating;lower
C) appreciating;higher
D) appreciating;lower

Question 38

If Germany's Real GDP rises,this tends to ________________ United States exports,shifting the United States AD curve to the ___________________.

A) raise;right.
B) raise;left.
C) lower;right.
D) lower;left.

Question 39

When the United States recovers from a recession,this tends to shift Germany's AD curve _________________,which _____________ Germany's price level.

A) rightward;raises
B) rightward;lowers
C) leftward;raises
D) leftward;lowers

Question 40

The problems of physical distance can be _____________ by technology which can serve to ___________ trade.

A) increased;discourage
B) reduced;enhance
C) increased;enhance
D) reduced;discourage

Question 41

The United States SRAS curve may shift to the left if we ____________________ Malaysia and the dollar ________________ against the Malaysian ringgit.

A) buy raw materials from;appreciates
B) buy raw materials from;depreciates
C) sell finished goods to;appreciates
D) sell finished goods to;depreciates

Question 42

A fall in the price of foreign inputs leads to a

A) rightward shift of the AD curve.
B) leftward shift of the AD curve.
C) rightward shift of the SRAS curve.
D) leftward shift of the SRAS curve.

Question 43

Dollar depreciation lowers United States Real GDP when the _____________ shift of the SRAS curve exceeds the __________ shift of the AD curve.

A) rightward;rightward
B) rightward;leftward
C) leftward;rightward
D) leftward;leftward

Question 44

A rise in the price of foreign inputs leads to a

A) rightward shift of the AD curve.
B) leftward shift of the AD curve.
C) rightward shift of the SRAS curve.
D) leftward shift of the SRAS curve.

Question 45

Suppose the price level in Germany rises,ceteris paribus.This ________________ United States net exports,ultimately shifting the United States AD curve ____________________.

A) stimulates;rightward
B) stimulates;leftward
C) depresses;rightward
D) depresses;leftward.

Question 46

The United States SRAS curve may shift to the right if we ____________________ Malaysia and the dollar ________________ against the Malaysian ringgit.

A) buy raw materials from;appreciates
B) buy raw materials from;depreciates
C) sell finished goods to;appreciates
D) sell finished goods to;depreciates

Question 47

In the short run following a depreciation of the dollar,the United States may move downward along the J-curve since it is likely that the United States

A) spends more dollars on imports.
B) spends fewer dollars on imports.
C) sells an increased dollar amount of exports.
D) sells a reduced dollar amount of exports.

Question 48

As the dollar depreciates,the dollar price of imported goods _________,ultimately shifting the United States AD curve __________________.

A) rises;rightward
B) rises;leftward
C) falls;rightward
D) falls;leftward

Question 49

Suppose we import only one good from Germany: cars.Initially,the exchange rate is $0.60 per euro.We import 150,000 cars annually,priced at 70,000 euros each.Then the euro rises to $0.625.Assuming the dollar value of our exports to Germany remains constant,we will stop moving down the J-curve and "turn the corner" to move upward along it once we import ______________ German cars per year.

A) fewer than 150,000
B) fewer than 144,000
C) fewer than 93,750
D) more than 150,000
E) more than 156,250

Question 50

As the dollar depreciates,the foreign price of United States goods _________________,ultimately shifting the United States AD curve _____________.

A) rises;rightward
B) rises;leftward
C) falls;rightward
D) falls;leftward

Question 51

Suppose United States net exports are -$50 billion.Then the dollar depreciates.In the short run,the United States may move downward along the J-curve,with net exports _________ and the AD curve shifting to the _______________.

A) coming closer to zero;left
B) coming closer to zero;right
C) moving further from zero;left
D) moving further from zero;right

Question 52

As the dollar appreciates,the dollar price of imported goods ___________ ultimately shifting the United States AD curve to the _______________.

A) rises;right
B) rises;left
C) falls;right
D) falls;left

Question 53

Suppose the supply of Malaysian rubber increases.If U.S.producers purchase this rubber,in the United States,this would cause a

A) rightward shift of the AD curve.
B) leftward shift of the AD curve.
C) rightward shift of the SRAS curve.
D) leftward shift of the SRAS curve.

Question 54

As the dollar appreciates,the foreign price of United States goods ______________,ultimately shifting the United States AD curve ________________.

A) rises;rightward
B) rises;leftward
C) falls;rightward
D) falls;leftward

Question 55

When the United States moves upward along the J-curve,it is because a depreciation of the dollar is having the _____________ effect of _____________ the number of dollars spent on imports.

A) long-run;increasing
B) long-run;reducing
C) short-run;increasing
D) short-run;reducing

Question 56

Can a change in the Japanese price level cause the United States to move downward along its J-curve?

A) Yes,if the Japanese price level falls and the United States does not buy more Japanese goods.
B) Yes,if the Japanese price level falls and the United States buys more Japanese goods.
C) Yes,if the Japanese price level rises and the United States does not buy significantly fewer Japanese goods.
D) No,a change in relative price levels cannot initiate the J-curve phenomenon.

Question 57

Suppose the supply of Malaysian rubber decreases.If U.S.producers purchase this rubber,in the United States,this would cause a

A) rightward shift of the AD curve.
B) leftward shift of the AD curve.
C) rightward shift of the SRAS curve.
D) leftward shift of the SRAS curve.

Question 58

When the United States is moving downward along the J-curve,its trade balance is ______________ as an immediate after-effect of a____________________ of the dollar.

A) improving;depreciation
B) improving;appreciation
C) worsening;depreciation
D) worsening;appreciation

Question 59

Dollar depreciation raises United States Real GDP when the __________ shift of the AD curve exceeds the _________________ shift of the SRAS curve.

A) rightward;rightward
B) rightward;leftward
C) leftward;rightward
D) leftward;leftward

Question 60

Suppose the price level in Germany falls,ceteris paribus.This _________________ United States net exports,ultimately shifting the United States AD curve __________________.

A) stimulates;rightward
B) stimulates;leftward
C) depresses;rightward
D) depresses;leftward

Question 61

Which of the following is not an affect of a lower federal government budget deficit?

A) a lower real interest rate
B) an appreciation of the currency
C) a rise in exports
D) a fall in the price of foreign inputs

Question 62

If the United States buys inputs from France and the dollar appreciates relative to the euro,then Americans will have to pay ________________ for foreign inputs,and the U.S.SRAS curve will shift __________________.

A) less;rightward
B) less;leftward
C) more;rightward
D) more;leftward

Question 63

If U.S.real interest rates fall,international repercussions put _________________ pressure on the price level and __________________ pressure on Real GDP in the United States.

A) upward;upward
B) upward;downward
C) downward;upward
D) downward;downward

Question 64

A simultaneous rightward shift in SRAS and leftward shift in AD may come from a dollar _______________ in the aftermath of a ____________________ in United States real interest rates.

A) depreciation;rise
B) depreciation;fall
C) appreciation;rise
D) appreciation;fall

Question 65

With an increase in the budget deficit,the open-economy outcome,compared to the closed-economy outcome,features a ___________ in Real GDP.

A) larger rise
B) smaller rise
C) larger fall
D) smaller fall

Question 66

International feedback effects ________________ the effect on the unemployment rate of __________________ monetary policy.

A) dampen;only expansionary
B) dampen;expansionary and contractionary
C) amplify;only contractionary
D) amplify;contractionary and expansionary

Question 67

As a result of contractionary monetary policy,the open-economy outcome,compared to the closed-economy outcome,features a ___________ fall in Real GDP and a ____________ fall in the price level.

A) larger;larger
B) larger;smaller
C) smaller;larger
D) smaller;smaller

Question 68

A simultaneous leftward shift in SRAS and rightward shift in AD may come from a dollar _______________ in the aftermath of a ____________________ in United States real interest rates.

A) depreciation;rise
B) depreciation;fall
C) appreciation;rise
D) appreciation;fall

Question 69

With a decrease in the budget deficit,the open-economy outcome,compared to the closed-economy outcome,features a ___________ in Real GDP.

A) larger rise
B) smaller rise
C) larger fall
D) smaller fall

Question 70

Suppose Japanese real interest rates fall.Typically,we should expect a ____________ shift of the U.S.AD curve with a ___________________ shift in United States real interest rates.

A) rightward;larger
B) rightward;smaller
C) leftward;larger
D) leftward;smaller

Question 71

Which of the following is not an affect of a higher federal government budget deficit?

A) a higher real interest rate
B) a depreciation of the currency
C) a fall in exports
D) a fall in the price of foreign inputs

Question 72

Suppose the dollar depreciates in value in the foreign exchange markets.What is the impact on U.S.Real GDP?

A) It rises because dollar depreciation shifts the U.S.AD curve rightward.
B) It falls because dollar depreciation shifts the U.S.SRAS curve leftward.
C) There is no effect on Real GDP since dollar depreciation does not affect either the U.S.AD or the U.S.SRAS curve.
D) It depends on whether the U.S.AD curve shifts rightward by more or less than the U.S.SRAS curve shifts leftward.

Question 73

An increase in U.S.real interest rates causes the dollar to _________________,which tends to __________________ U.S.Real GDP.

A) appreciate;raise
B) appreciate;lower
C) depreciate;raise
D) depreciate;lower

Question 74

Which of the following is not an affect of a higher federal budget deficit?

A) a higher real interest rate
B) an appreciation of the currency
C) a rise in exports
D) a fall in the price of foreign inputs

Question 75

Suppose the dollar appreciates in value in the foreign exchange markets.What is the impact on U.S.Real GDP?

A) It rises because dollar appreciation shifts the U.S.AD curve leftward.
B) It falls because dollar appreciation shifts the U.S.SRAS curve rightward.
C) There is no effect on Real GDP since dollar appreciation does not affect either the U.S.AD or the U.S.SRAS curve.
D) It depends on whether the U.S.AD curve shifts leftward by more or less than the U.S.SRAS curve shifts rightward.

Question 76

A decrease in U.S.real interest rates causes the dollar to _________________,which tends to __________________ U.S.Real GDP.

A) appreciate;raise
B) appreciate;lower
C) depreciate;raise
D) depreciate;lower

Question 77

A decrease in Japanese real interest rates causes the dollar to _____________ which tends to _______________ U.S.Real GDP.

A) appreciate;raise
B) appreciate;lower
C) depreciate;raise
D) depreciate;lower

Question 78

Dollar appreciation raises United States Real GDP when the _____________ shift of the SRAS curve exceeds the __________ shift of the AD curve.

A) rightward;rightward
B) rightward;leftward
C) leftward;rightward
D) leftward;leftward

Question 79

If United States real interest rates rise,international repercussions put ____________ pressure on the price level and _______________ pressure on Real GDP in the United States.

A) upward;upward
B) upward;downward
C) downward;upward
D) downward;downward

Question 80

Which of the following is not an affect of a lower federal government budget deficit?

A) a higher real interest rate
B) a depreciation of the currency
C) a rise in exports
D) a rise in the price of foreign inputs