Question 1

Statement I: Mexico sends over 80 percent of its exports to the United States.
Statement II: Hourly wages in Mexico are one-eighth of those paid in the United States for comparable work.

Accepted Answer

Both statements are true. Mexico's economy heavily relies on trade with the United States, with over 80% of its exports going to the US. Additionally, hourly wages in Mexico are significantly lower than in the United States, with one study finding that they are around one-eighth of those paid in the US for comparable work.

Question 2

The establishment of the NAFTA agreement

Accepted Answer

NAFTA was generally supported by economists and the business community as it was expected to increase trade and economic growth among the member countries.

Question 3

The most important economic concept to consider when deciding whether to build your own deck or hire it done is

Accepted Answer

The most important economic concept to consider is opportunity cost, which means the value of the next best alternative forgone. By choosing to build your own deck, you may save money on labor costs, but you are sacrificing your time, which could be spent on other activities such as work or leisure. On the other hand, hiring someone to build the deck means you are paying for their labor, but you are saving your own time. Thus, it is important to weigh the opportunity cost of each option and decide which is more valuable to you.

Question 4

Statement I: The WTO regulates world trade.
Statement II: The basis for international trade is that all nations stand to gain through specialization and exchange with other nations.

Accepted Answer

Statement I is true as the WTO (World Trade Organization) was established to regulate and govern world trade. Statement II is also true as the basis for international trade is indeed specialization and exchange, as all nations can benefit by producing goods in which they have a comparative advantage and trading them with others. Therefore, both statements are true.

Question 5

All of the following are an example of "off-shoring" EXCEPT

Accepted Answer

Off-shoring refers to the practice of moving jobs or work to another country, often for lower labor costs. Choice D involves hiring a local firm within the same country (USA) and therefore is not an example of off-shoring.

Question 6

In 2009,X_n was about

Accepted Answer

The given expression does not have any particular meaning or context provided. It's just a combination of characters and numbers. Therefore, it is not possible to determine a specific value or meaning associated with it. Hence, the answer should be none of the choices. However, if we assume that this expression represents a value or quantity, the closest option would be B, which is $400 billion.

Question 7

After World World II,the United States produced about ______ percent of the world's oil,much of which we exported.

Accepted Answer

After World War II, the United States became the world's largest oil producer and produced about 60% of the world's oil. Much of this oil was also exported to other countries.

Question 8

Statement I: China and South Korea are the world's largest exporters.
Statement II: International trade is more important to the U.S.economy than it is to smaller industrial countries such as the Netherlands.

Accepted Answer

Statement I is false because while China is one of the world's largest exporters, South Korea is not the largest, countries like the United States and Germany also rank highly. Statement II is false because international trade is often more critical to smaller countries like the Netherlands, which rely more heavily on trade relative to their GDP than larger economies like the U.S.

Question 9

Statement I: The European Monetary Union has the same number of members as the European Union.
Statement II: Twelve nations of the European Union have adopted the euro as a common currency.

Accepted Answer

Statement I is false because the European Monetary Union (Eurozone) does not include all European Union members. As of my last update, there are 27 EU countries but only 19 have adopted the euro. Statement II is also false because more than twelve nations in the European Union have adopted the euro as their common currency; the correct number is 19.

Question 10

Statement I: The International Monetary Fund (IMF)was set up to promote free trade,free market style economies around the world.
Statement II: The World Bank was created in 1944 for the purpose of making long-term,low-interest loans to developing countries,mainly to build highways,bridges,dams,power generators,and water supply systems.

Accepted Answer

Statement I is false because the primary purpose of the IMF is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries to transact with each other. Statement II is true as the World Bank was indeed created in 1944 with the purpose of providing financial and technical assistance to developing countries for development programs (e.g., bridges, roads, schools, etc.) that are expected to improve the economic prospects and quality of life for people in those countries.

Question 11

In 2009,___________ exceeded Germany in value of exports becoming the world's largest exporter.

Accepted Answer

In 2009, China surpassed Germany in the value of exports, becoming the world's largest exporter. This trend has continued, with China remaining the largest exporter in the world in recent years.

Question 12

The agreement between the U.S. ,the Dominican Republic and five small Central American countries that will eventually eliminate tariffs among all seven nations is called

Accepted Answer

The correct agreement that involves the U.S., the Dominican Republic, and five small Central American countries is CAFTA (Central America Free Trade Agreement). NAFTA (North American Free Trade Agreement) involves the U.S., Canada, and Mexico, while Mercosur is a trading bloc in South America. GATT (General Agreement on Tariffs and Trade) was a multilateral agreement that aimed to reduce trade barriers between member countries. However, it was replaced by the World Trade Organization (WTO) in 1995.

Question 13

Which of the following were prominent among the protesters at the WTO meeting in Seattle in late 1999?

Accepted Answer

Environmentalists were notably prominent among the protesters at the WTO meeting in Seattle in 1999, concerned about corporations exploiting lax environmental regulations in different countries.

Question 14

Which of the following working conditions are common at sweatshops?

Accepted Answer

All of the listed conditions are common at sweatshops. Workers are often not provided with information about hazardous materials they are using, leading to unsafe working conditions. The lack of guards on machines poses risks to workers' physical safety. Restricted bathroom break times and blocked aisles and fire exits contribute to an overall unsafe working environment.

Question 15

Which statement is true?

Accepted Answer

The answer of Which statement is true?
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Question 16

Statement I: Adam Smith believed the key to wealth for a nation was self-sufficiency.
Statement II: Adam Smith believed what made sense in the conduct of a private family's economic endeavors also made sense for those of a nation.

Accepted Answer

Adam Smith believed in the division of labor, specialization, and free trade to increase wealth for a nation. He believed that what made sense for individuals to pursue their self-interest would also apply to nations in terms of specialization and trade. Thus, statement I is false and statement II is true.

Question 17

Which is the most accurate statement?

Accepted Answer

This statement accurately reflects the presence of environmentalists, organized labor, and human rights advocates among the protesters at WTO meetings.

Answer: None of the other options are accurate. 
 Option A is not true as running large trade deficits for a prolonged period can harm the economy. Option C is false as trade deficits with both countries have increased after the implementation of NAFTA. Option D is not true as the protestors at WTO meetings are generally critical of the negative impacts of globalization on labor and human rights.

Question 18

In 2004,___________ exceeded the United States in value of exports becoming the world's largest exporter.

Accepted Answer

In 2004, Germany surpassed the United States to become the world's largest exporter, a position it held until China overtook it in 2009.

Question 19

The most important economic concept to consider when deciding whether to produce a product domestically or import the product is

Accepted Answer

When deciding whether to produce a product domestically or import the product, the most important economic concept to consider is opportunity cost. Opportunity cost refers to the cost of the next best alternative forgone when making a decision, including the cost of producing the product domestically versus importing it from another country. Therefore, companies must consider the cost of producing the product domestically, including labor costs, taxes, and regulatory costs, against the cost of importing the product from another country, including transportation costs, tariffs, and foreign exchange rates. By considering the opportunity cost, companies can make a more informed decision about whether to produce the product domestically or import it.

Question 20

Which of the following groups would like to see a rise in the value of the dollar vs.the euro?

Accepted Answer

A rise in the value of the dollar vs. the euro would make European goods and services cheaper for Americans, benefiting those planning a European vacation.

Quiz 8: The Export-Import Sector

Statement I: Mexico sends over 80 percent of its exports to the United States. Statement II: Hourly wages in Mexico are one-eighth of those paid in the United States for comparable work.