Question 1

Which of the following statements about the importance of trade to the U.S.economy is false?

Accepted Answer

The statement "The U.S. economy is highly dependent on international trade for growth in its gross domestic product" is false. While trade does play an important role in the U.S. economy, it is not the only factor contributing to GDP growth. Other factors such as domestic consumption, government spending, and investment also play a significant role in driving economic growth.

Question 2

Over the past several decades there has been rapid growth in international trade.This growth has been due to all but one of the following factors.Which factor has not contributed to the growth of international trade?

Accepted Answer

An increase in tariffs would discourage international trade, not promote it. The other factors listed have contributed to the growth of international trade - reliable communications have made it easier to conduct business across borders, reductions in shipping costs have made it more feasible to transport goods around the world, and favorable changes in government policies (such as trade agreements and investment incentives) have created more opportunities for trade.

Question 3

In the 1930s the United States charged an average tariff rate

Accepted Answer

In the 1930s, the United States implemented the Smoot-Hawley Tariff Act, which significantly raised U.S. tariffs on many imported goods. This act led to average tariff rates exceeding 50 percent, aiming to protect American industries during the Great Depression but ultimately contributing to a decline in international trade.

Question 4

Domestically produced goods and services sold to other countries are referred to as

Accepted Answer

Exports are goods and services produced domestically that are sold to other countries.

Question 5

When a tariff is placed on running shoes,the ________ to local businesses and local consumers are likely to be greater in dollar terms than the ________ to the owner of a shoe factory and its workers.

Accepted Answer

When a tariff is placed on running shoes, the price of imported shoes increases, making them less competitive compared to locally produced shoes. Therefore, local businesses selling shoes and local consumers buying shoes have to pay more, resulting in losses for them. On the other hand, the owner of a shoe factory and its workers benefit from the tariff as they have less competition, resulting in gains for them. Hence, the losses to local businesses and consumers are likely to be greater in dollar terms than the gains to the owner of a shoe factory and its workers.

Question 6

As a percentage of GDP,imports are greater than exports for which of the following countries?

Accepted Answer

The United States has a trade deficit, meaning that its imports are greater than its exports, as a percentage of its GDP.

Question 7

Twenty-eight countries in Europe have formed the European Union (EU).After the EU was formed it

Accepted Answer

One of the main goals of the EU was to create a single market without barriers, including the elimination of tariffs among its member countries. This has been mostly achieved, with few exceptions such as agricultural tariffs.

B, C, and D are incorrect because NAFTA is a trade treaty between North American countries (United States, Canada, and Mexico); the EU has not completed a trade treaty with NAFTA countries. Decreasing imports and exports among its member countries would be against the principle of a single market and common economic policy. The EU does not bar imports of specific products from non-EU countries.

Question 8

Although the United States is the second largest exporting country,international trade is less important to the United States than it is to most other countries.

Accepted Answer

The United States has a large and diverse economy where international trade represents a smaller percentage of its GDP compared to smaller countries or those more reliant on exports and imports for their economic activities.

Question 9

In 2017,President Trump ________ the Trans-Pacific Partnership (TPP),an agreement designed to reduce trade barriers between the United States and 11 other countries.

Accepted Answer

President Trump pulled the United States out of negotiations on the Trans-Pacific Partnership (TPP) in 2017, as he believed it would not benefit American workers and businesses.

Question 10

Imports are goods and services bought domestically

Accepted Answer

Imports are goods and services that are produced in other countries and brought into the domestic market for consumption or sale.

Question 11

Since 1999,________ U.S.manufacturing jobs may have been lost to Chinese imports,and trade with China has ________ throughout the United States.

Accepted Answer

Since 1999, the U.S. has lost more than 2 million manufacturing jobs to Chinese imports, but trade with China has also created other jobs in different sectors throughout the United States.

Question 12

Which of the following countries is not one of the top three exporting countries in the world?

Accepted Answer

According to the World Trade Organization (WTO), the top three exporting countries in the world are China, the United States, and Germany. South Korea is not within the top three.

Question 13

A tax imposed by a government on imports of a good into a country is called

Accepted Answer

A tax imposed by a government on imports of a good into a country is called a tariff. An import levy and an import fine are not specific terms used to describe tariffs. An import quota is a restriction on the quantity of goods that can be imported, and is not synonymous with a tariff.

Question 14

When Tesla,a U.S.company,purchases Italian-made Pirelli tires for its automobiles,the purchase is

Accepted Answer

The purchase is a U.S. import because Tesla is a U.S. company and it is importing the Italian-made Pirelli tires. It is also an Italian export because Pirelli, the manufacturer of the tires, is an Italian company and it is exporting the tires to the U.S. for Tesla to use in its automobiles.

Question 15

A tariff is a tax imposed by a government on imports.

Accepted Answer

This is a correct definition of a tariff, which is a trade barrier imposed by a government to protect domestic industries or raise revenue. Tariffs can make imported goods more expensive and less competitive in the local market.

Question 16

When Sophie,a French citizen,purchases a Dell computer in Paris,France that was produced in Texas,the purchase is

Accepted Answer

The purchase is a U.S. export and a French import because the computer was produced in Texas (U.S.) and purchased in Paris, France.

Question 17

Which of the following statements is false?

Accepted Answer

The statement that the United States exports very little of its wheat, rice, and corn crops because of the high cost of labor is false. In reality, the United States is a major exporter of agricultural products, including wheat, corn, and soybeans. The high cost of labor is offset by factors such as high productivity, technological advances, and government subsidies.

Question 18

The 1994 agreement that eliminated most tariffs among the United States,Canada,and Mexico is known as

Accepted Answer

The 1994 agreement that eliminated most tariffs among the United States, Canada, and Mexico is known as NAFTA (North American Free Trade Agreement). None of the other options mentioned are correct.

Question 19

Which of the following statements is false?

Accepted Answer

This statement is false. Imports can also benefit trading countries by providing consumers with a wider variety of goods at lower prices and by creating new jobs in industries that rely on imported materials or products. Additionally, exports can also result in a loss of jobs if the domestic market for the exported goods is smaller than the jobs lost in producing those goods.

Question 20

Imports are goods and services bought domestically but produced in other countries.

Accepted Answer

Imports refer to goods and services that are purchased by individuals, businesses, or governments in one country, but are produced in another country.

Quiz 7: Comparative Advantage and the Gains From International Trade

Which of the following statements about the importance of trade to the U.S.economy is false?

Over the past several decades there has been rapid growth in international trade.This growth has been due to all but one of the following factors.Which factor has not contributed to the growth of international trade?

In the 1930s the United States charged an average tariff rate

Domestically produced goods and services sold to other countries are referred to as

When a tariff is placed on running shoes,the to local businesses and local consumers are likely to be greater in dollar terms than the to the owner of a shoe factory and its workers.

As a percentage of GDP,imports are greater than exports for which of the following countries?

Twenty-eight countries in Europe have formed the European Union (EU) .After the EU was formed it

Although the United States is the second largest exporting country,international trade is less important to the United States than it is to most other countries.

In 2017,President Trump ________ the Trans-Pacific Partnership (TPP) ,an agreement designed to reduce trade barriers between the United States and 11 other countries.

Imports are goods and services bought domestically

Since 1999, U.S.manufacturing jobs may have been lost to Chinese imports,and trade with China has throughout the United States.

Which of the following countries is not one of the top three exporting countries in the world?

A tax imposed by a government on imports of a good into a country is called

When Tesla,a U.S.company,purchases Italian-made Pirelli tires for its automobiles,the purchase is

A tariff is a tax imposed by a government on imports.

When Sophie,a French citizen,purchases a Dell computer in Paris,France that was produced in Texas,the purchase is

Which of the following statements is false?

The 1994 agreement that eliminated most tariffs among the United States,Canada,and Mexico is known as

Which of the following statements is false?

Imports are goods and services bought domestically but produced in other countries.