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.

Accepted Answer

Zimbabwe has experienced negative economic growth in the last 20 years, primarily due to political instability and hyperinflation. Chad, the United States, and China have all experienced economic growth in the last 20 years.

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.

Accepted Answer

All three statements are true. Countries usually have more trade with their neighboring countries due to geographical proximity and easier transportation. The United States is a large economy and has a significant amount of trade with many countries. Industrialized countries have higher trade volumes due to their larger economies and established trade relations.

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.

Accepted Answer

While a high index of openness may contribute to a country's ability to be a leading world exporter, it is not a necessary condition. Factors such as availability of resources, skilled labor, and government policies can also play a role.

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.

Accepted Answer

International trade represents approximately 30 percent of world output and has been growing at a faster rate than the world economy in recent years. Option A is incorrect as it greatly overestimates the importance of international trade. Option C is incorrect as international trade has been growing at a faster rate than the world economy.

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.

Accepted Answer

Much of the trade of the European Union (EU) countries is with EU countries, which means that they tend to trade relatively more with each other than with other countries. While industrialized countries do trade with developing countries, the majority of their trade is still with other industrialized countries. Developing countries in Africa and South America may trade with each other, but they typically have less trade overall compared to industrialized countries.

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.

Accepted Answer

The statement "Countries with large populations tend to be rich" is false. Population size is not necessarily correlated with a country's wealth or economic development. For example, China has a large population but its per capita income is still relatively low compared to smaller countries like Norway or Switzerland.

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.

Accepted Answer

The ratio of a country's exports to its total output (GNP or GDP) is commonly used to measure the importance of international trade to that economy. This ratio is called the index of openness. If this ratio is low, it indicates that the country is less reliant on foreign trade, while a high ratio implies a greater dependence on trade. This ratio for the United States is relatively low, indicating that the US economy is less dependent on trade than some other countries. Therefore, all of the above options are correct.

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.

Accepted Answer

This is true. Developing countries often have more volatile economies than industrialized countries due to factors such as political instability, higher levels of debt, and dependence on exports of raw materials.

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.

Accepted Answer

While Japan does export some agricultural products such as rice, its main export products are manufactured goods including motor vehicles, electronics, and machinery. Natural resource products such as coal are not a significant part of Japan's export profile.

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.

Accepted Answer

Russia has experienced positive economic growth over the last 20 years. Zimbabwe and Haiti, on the other hand, have both experienced significant economic 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.

Accepted Answer

GDP measures the total value of goods and services produced within a country's borders, regardless of who owns the resources. On the other hand, GNP measures the total value of goods and services produced by a country's residents, regardless of where they are located. In other words, GNP includes the income earned by a country's citizens who live and work abroad, while GDP does not include this income. Therefore, the best choice is C.

Question 12

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

Accepted Answer

GNP (Gross National Product) is the total value of all goods and services produced by a country's residents, both domestically and abroad, whereas GDP (Gross Domestic Product) is the total value of all goods and services produced within a country's borders, regardless of the nationality of the producers. Therefore, GNP may be larger or smaller than GDP depending on factors such as the country's level of international trade and investment.

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.

Accepted Answer

Per capita GNP is calculated by dividing a country's Gross National Product (GNP) by its population. This calculation gives an estimate of the average income per person in a country. Therefore, choice A is the correct answer as it divides the GNP by the population.

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.

Accepted Answer

Automobiles have consistently been one of the most traded products by value globally, due to their high demand and significant contribution to international trade.

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.

Accepted Answer

All of the given options are true, as countries of the world differ in terms of their geographic size, population size, and standards of living. Some countries are large in size, such as Russia and Canada, while others are small in size, such as Maldives and Monaco. Similarly, some countries have high populations, like China and India, while others have low populations, like Iceland and Liechtenstein. Finally, countries also differ in their standards of living, which is reflected in indicators such as GDP per capita, human development index, and quality of life.

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.

Accepted Answer

Both A and B are true. While technological improvements have reduced some barriers to trade, government policies such as tariffs and quotas still exist as significant barriers to international trade. Additionally, some countries have indeed imposed higher tariffs since World War II, leading to an increase in trade barriers.

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.

Accepted Answer

The types of goods Japan exports and imports are well explained by Japanese endowments of factors of production, such as their technology, skilled labor force, and limited natural resources. High and rising tariffs and advertising and sales promotion efforts may also play a role, but they are not the primary explanation.

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.

Accepted Answer

As of 2007, the United States had the largest deficit in its current account. This means that the country was importing more goods and services than it was exporting, resulting in a negative balance of payments.

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.

Accepted Answer

The United States exports a wide range of products, including manufactured goods such as automobiles, pharmaceuticals, and aerospace equipment, as well as agricultural products such as soybeans and corn. Therefore, option B is the correct choice.

Question 20

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

Accepted Answer

Recall the example of Singapore.

Quiz 1: An Introduction to International Trade

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

Which of the following statements is true?

Which of the following statements is false?

International trade

Which of the following is true?

Which of the following statements is false?

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

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.

Japanese exports are heavily concentrated in

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

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

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

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

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

Countries of the world differ in terms of their

Barriers to trade

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

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

The United States tends to export

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