Deck 19: International Economic Relations

Question 1

The reason international trade is controlled has to do with how economics relates to:

A) politics.
B) biology.
C) chance factors.
D) invention.

Answer 1

A

Question 2

Most economists oppose the levying of:

A) all taxes.
B) protective tariffs.
C) any kind of minimal tariff.
D) any kind of revenue generating tax by a government.

Answer 2

B

Question 3

In the 1960s, 1970s, and 1980s, international trade expanded in the developing countries, mainly in the area of:

A) farming.
B) textiles.
C)technolog.
D) manufacturing.

Answer 3

D

Question 4

Which of the following is NOT an advantage of international trade?

A) better product can be obtained
B) lower prices for products
C) local producers may be hurt
D) products that cannot be produced at home can be obtained

Question 5

In most cases, nations would derive the greatest economic advantage from international trade if they:

A) tightly controlled imports.
B) allowed free trade.
C) controlled all types of trade.
D) eliminated all exports.

Question 6

Economists who favor free trade view free trade areas created by associations of countries with:

A) much favor.
B) much fear.
C) both favor and fear.
D) great joy.

Question 7

A tax or duty on an imported commodity is called a(n):

A) tariff.
B) bill.
C) arbitrary cost.
D) revenue limit.

Question 8

A limit on the quantity or the value of a commodity that can be brought into a country is called a(n):

A) tax barrier.
B) tariff.
C) quality control.
D) import quota.

Question 9

In 1947, most Western nations agreed to a mutual effort to reduce trade barriers through the:

A) North Atlantic Treaty Organization.
B) Organization of Petroleum Exporting Countries.
C) Security Council of the United Nations.
D) General Agreement on Trade and Tariffs.

Question 10

In the mid-1990s, GATT was replaced by the:

A) Reciprocal Trade Group (RTG).
B) International Commerce Circle (ICC).
C) World Trade Organization (WTO).
D) Global Corporation Group (GCG).

Question 11

Between 2000 and 2005, the Bureau of Economic Analysis reported that the U.S. trade balance:

A) improved.
B) worsened significantly.
C) had no appreciable change.
D) There is no way to factor the amount of trade between countries.

Question 12

The home-market argument in favor of protective tariffs results in:

A) decreases in home product industry employment.
B) decreases in protected home product industry profits.
C) short term failure of home industry.
D) long term benefits for some producers at the expense of losing foreign markets for other producers.

Question 13

Invisible items of trade include:

A) wheat, barley, corn, and rye.
B) machinery.
C) U.S. tourist payments in foreign countries.
D) rice.

Question 14

The relation of our total exports to our total imports is called the balance of:

A) income.
B) payments.
C) trade.
D) money.

Question 15

Which of the following is NOT an argument against protective tariffs?

A) restricting international trade robs us of part of its benefits
B) free admission of imports is one of the most effective ways of expanding the foreign markets of home industries
C) when one country institutes tariffs, it is likely that other countries will follow
D) a tariff that keeps out foreign goods increases the market for U.S. goods

Question 16

In the 1980s, the balance of trade deficits become so large that the U.S. became:

A) a net debtor nation.
B) a net creditor nation.
C) a surplus nation.
D) the first nation not to import anything.

Question 17

When one country institutes tariffs, it is likely that other countries will follow resulting in:

A) a contracting spiral of trade.
B) an expanding trade network.
C) benefits from increased trade worldwide.
D) a free trade zone.

Question 18

Since the 1930s, the importance of international trade for the United States has:

A) declined.
B) remained unchanged.
C) increased until 1950 and then sharply declined.
D) grown significantly.

Question 19

In 2012, the U.S. balance of payments was:

A) running a major deficit.
B) balanced by increased trade advantage.
C) running a significant deficit.
D) exactly equal to the balance of trade surplus.

Question 20

When countries meet under GATT in order to reduce trade barriers, these meetings are called:

A) circles.
B) trade rounds.
C) confrontations.
D) squares.

Question 21

The 1970s marked a new dimension in the expansion of international trade.

Question 22

In the 1930s, the United States followed an isolationist policy toward trade.

Question 23

Trade imbalances can be offset by foreign capital investment.

Question 24

International trade raises standards of living by increasing consumer purchasing power.

Question 25

The crisis and shortages in the U.S. economy as a result of the Arab oil embargo in the 1970s demonstrated the importance of international trade.

Question 26

Trade is best seen as taking place between two counties without the other countries in the picture.

Question 27

Trade is the lifeblood of a modern economy.

Question 28

If countries decide to stop accepting U.S. dollars and promissory notes and instead want goods and services, the value of the dollar will likely:

A) fall substantially.
B) rise modestly.
C) decrease slightly.
D) be maintained.

Question 29

International trade now accounts for well over 50 percent of our total GDP.

Question 30

U.S. producers as a group are injured by foreign purchases.

Question 31

Controls on international trade include subsidies on exports, tariffs, quotas, exchange controls, and bilateral barter agreements.

Question 32

The U.S. changed from a fixed exchange rate to a generally flexible exchange rate in:

A) 1917.
B) 1986.
C) 1945.
D) 1971.

Question 33

From 2000 to 2008, the U.S. balance of trade deficit leapt to over $700 billion a year.

Question 34

International trade has only advantages.

Question 35

Invisible items of trade consist of services of all sorts for which people of one country pay those of another.

Question 36

Interest Americans receive from foreign investments are unimportant in the U.S. economy.

Question 37

For many years before World War I, the principal trading countries maintained monetary systems based on:

A) flexible exchange rates.
B) adjustable exchange rates.
C) variable exchange rates.
D) fixed exchange rates.

Question 38

The U.S. exchange rate system is called a(n):

A) dirty float.
B) sinking boat.
C) dollar value-added.
D) ad valorem.

Question 39

One commodity that is desirable in the United States that we cannot produce ourselves is coffee.

Question 40

Although the value of the dollar has recently been on a roller-coaster ride, fluctuating, the general trend of the dollar has been:

A) up substantially.
B) unfluctuating.
C) positive.
D) down.

Question 41

Note some ways to protect American jobs from being lost to foreign nations. Why do most economist oppose such measures? What do they cite as being the impact on pricing of goods in the American market?

Question 42

What are the advantages and disadvantages of international trade? Why and how are the advantages linked to the disadvantages?

Question 43

Why do countries place restrictions on international trade? What are tariffs and import quotas? What are the arguments for and against protective tariffs?

Question 44

The IMF has helped stabilize foreign exchange rates.

Question 45

The United States is the largest debtor nation in the world.

Question 46

Recently the American dollar has been very stable.

Question 47

After World War II, the Western world went on a modified gold standard.

Question 48

What are the arguments in favor of free trade? What global efforts have been made to remove trade restrictions? How do free trade areas impact free trade?

Question 49

The U.S. dollar serves as an international reserve currency.

Question 50

Critics of globalization argue that to prevent job loss we should protect domestic jobs by establishing tariffs on imports.

Question 51

What is the meaning of foreign exchange? What is the difference between a fixed and flexible exchange rate system? How does the current exchange rate system of the United States work?

Question 52

World trade expanded during 1929-1933.

Question 53

When two or more countries are on the gold standard, only very large fluctuations can take place in the exchange rate between their currencies.

Question 54

When tariffs are levied as a percentage of a value of a commodity, they are said to be ad hominen.

Question 55

Erratic fluctuations in exchange rates help trade and reduce risk in transactions.

Question 56

Global corporations can avoid import quotas.