Econ homework

Question 1

 

Economic relationships with other countries are important to a nation because they can affect:

	A.	the nation's domestic economy.
	B.	political relationships with other nations.
	C.	the level of social understanding with people in different countries.
	D.	all of the above.

1 points  

Question 2

 

International trade:

	A.	is the buying and selling of goods and services among different countries.
	B.	can result in the employment of fewer resources in a country if domestic firms face strong foreign competitors.
	C.	can result in the employment of more resources in a country than would be the case if only domestic demand were met.
	D.	all of the above.

1 points  

Question 3

 

A good or service produced abroad and purchased domestically is:

	A.	an export.
	B.	an import.
	C.	an inside good.
	D.	external debt.

1 points  

Question 4

 

Country A can produce 9 raincoats or 6 tents with one unit of resources, and Country B can produce 8 raincoats or 8 tents with one unit of resources.

Reference: Ref 16-2

The opportunity cost to Country A of using its one unit of resources to produce 9 raincoats is:

	A.	6 tents.
	B.	3 tents.
	C.	2/3 of a tent.
	D.	none of the above.

1 points  

Question 5

 

Use the following table.

Reference: Ref 16-4

If the U.S. and Japan each have two units of resources, and divide their resources equally between the production of each good, the maximum possible output is:

	A.	150 tons of grain and 2,200,000 microchips.
	B.	200 tons of grain and 1,000,000 microchips.
	C.	100 tons of grain and 2,400,000 microchips.
	D.	150 tons of grain and 2,000,000 microchips.

1 points  

Question 6

 

Specialization based on comparative advantage accompanied by trade among producing nations:

	A.	has no effect on the scarcity problem, but changes the distribution of the world's output.
	B.	increases the scarcity problem by increasing the worldwide demand for products.
	C.	can reduce the scarcity problem.
	D.	can eliminate the scarcity problem.

1 points  

Question 7

 

Free trade refers to:

	A.	the unrestricted exporting and importing of goods and services.
	B.	trade where one country's gain from a transaction is perfectly offset by another country's loss from the same transaction.
	C.	charitable transfers between nations where one nation gets goods or services from another without paying anything in return.
	D.	none of the above.

1 points  

Question 8

 

The philosophy that it is in the best interest of a country to restrict imports is:

	A.	retrenching.
	B.	comparative advantage.
	C.	protectionism.
	D.	paternalism.

1 points  

Question 9

 

Protectionist policies are advocated by those who believe that:

	A.	unrestricted free trade can injure some industries and jobs.
	B.	national security warrants trade restrictions.
	C.	diversification of production is in a country's best interest.
	D.	all of the above.

1 points  

Question 10

 

A tax on an import is:

	A.	a voluntary trade restraint.
	B.	a quota.
	C.	an embargo.
	D.	a tariff.

1 points  

Question 11

 

A restriction on the quantity of a good that can be imported into a country is:

	A.	an embargo.
	B.	a quota.
	C.	a tariff.
	D.	a trade subsidy.

1 points  

Question 12

 

A total ban on trade in a particular good with another country is:

	A.	a quota.
	B.	a tariff.
	C.	an embargo.
	D.	a trade subsidy.

1 points  

Question 13

 

You would expect free, or unrestricted, international trade to:

	A.	limit the sizes of markets in which goods are bought and sold.
	B.	reduce the possibilities for specialization in the use of factors of production.
	C.	reduce the prices of traded goods below what they would be with trade restrictions.
	D.	reduce competition in markets where goods are traded internationally.

1 points  

Question 14

 

Restricting trade to protect an industry in the early stages of its development is justified using the:

	A.	domestic employment and output argument.
	B.	national security argument.
	C.	diversification argument.
	D.	infant industry argument.

1 points  

Question 15

 

A protectionist argument that dependence on foreign-produced goods and services should be reduced and that a nation should not become too specialized is based on the principle of:

	A.	waste not - want not.
	B.	diversification.
	C.	diminishing returns.
	D.	comparative advantages.

1 points  

Question 16

 

Which of the following statements is true?

	A.	Most countries follow a strict free trade or strict protectionist policy.
	B.	A country may adopt more liberal trading terms with some countries than with others.
	C.	A country's international trade policies never shift with changing political and economic conditions.
	D.	All of the above.

1 points  

Question 17

 

The sale of a product in a foreign market at a price below cost or below the domestic price is called:

	A.	discounting.
	B.	dumping.
	C.	international wholesaling.
	D.	free trade.

1 points  

Question 18

 

Since World War II tariff reductions have occurred largely because of negotiations under the:

	A.	Monetary Control Act.
	B.	Employment Act of 1946.
	C.	General Agreement on Tariffs and Trade.
	D.	Industry and Trade Administration.

1 points  

Question 19

 

A tax on imports of electronic equipment is an example of:

	A.	a tariff.
	B.	a quota.
	C.	a free trade policy.
	D.	an embargo.

1 points  

Question 20

 

Which of the following policies would a government impose in an effort to encourage exports of its products to other countries?

	A.	Percentage of value tariffs on products.
	B.	Quotas.
	C.	Subsidies.
	D.	Embargoes.

1 points  

Question 21

 

An exchange rate is:

	A.	determined by the United Nations.
	B.	the number of units of a nation's money that is equal to one unit of another nation's money.
	C.	the number of units of a nation's output that is equal to one unit of another nation's output.
	D.	the number of units of gold backing a nation's money.

1 points  

Question 22

 

Fixed exchange rates are exchange rates between nations' monies:

	A.	that are set at a fixed percentage of an index of inflation rates in key countries.
	B.	where the values of the monies are defined in terms of gold.
	C.	that are determined by the forces of supply and demand.
	D.	that are adjusted for differences in inflation rates.

1 points  

Question 23

 

Exchange rates that change when a nation redefines the value of its currency in terms of gold are called:

	A.	floating exchange rates.
	B.	fixed exchange rates.
	C.	convertible exchange rates.
	D.	flexible exchange rates.

1 points  

Question 24

 

Reducing the amount of gold backing a nation's monetary unit is called:

	A.	depreciation.
	B.	deflation.
	C.	devaluation.
	D.	deregulation.

1 points  

Question 25

 

If the rate at which one nation's money exchanges for one unit of another nation's money is determined by the forces of supply and demand, the two nations are on a:

	A.	flexible, or floating, exchange rate system.
	B.	fixed exchange rate system.
	C.	world-average-of-countries exchange rate system.
	D.	relative exchange rate system.

1 points  

Question 26

 

As the number of British pounds that a certain amount of U.S. dollars will buy increases, the prices of British goods to holders of U.S. dollars:

	A.	decrease.
	B.	increase slightly.
	C.	increase significantly.
	D.	remain the same.

1 points  

Question 27

 

Use the following figure showing the supply of, and demand for, Israeli new shekels by holders of U.S. dollars.

Reference: Ref 17-1

This figure applies to a:

	A.	fixed exchange rate system between the dollar and the new shekel.
	B.	flexible exchange rate system between the dollar and the new shekel.
	C.	gold-based exchange rate system between the dollar and the new shekel.
	D.	none of the above.

1 points  

Question 28

 

A decrease in the price of the U.S. dollar relative to foreign currencies will result in all of the following EXCEPT:

	A.	An increase in foreign tourism in the U.S.
	B.	An increase in U.S. imports.
	C.	An increase in foreign investment in the U.S.
	D.	An increase in U.S. exports.

1 points  

Question 29

 

Under a system of flexible exchange rates, the values of two nations' monies are determined:

	A.	using United Nations guidelines for international agreements.
	B.	in a foreign exchange market.
	C.	on the basis of intergovernmental agreements between the two nations.
	D.	in a gold market.

1 points  

Question 30

 

The Swiss franc and the U.S. dollar, the Swiss franc and the British pound, and the Japanese yen and the Polish zloty are traded:

	A.	in three different foreign exchange markets.
	B.	in the same foreign exchange market.
	C.	using United Nations guidelines for international agreements.
	D.	in the gold market.

1 points  

Question 31

 

Which of the following would cause an increase in the U.S. demand for Japanese yen?

	A.	Rising prices on Japanese machinery and equipment.
	B.	Inflation in Japan.
	C.	A decrease in the U.S. demand for Japanese goods.
	D.	Inflation in the United States.

1 points  

Question 32

 

The number that results when merchandise imports are subtracted from merchandise exports is:

	A.	always less than zero.
	B.	the official reserve account balance.
	C.	always greater than zero.
	D.	the balance of trade.

1 points  

Question 33

 

If U.S. buyers purchased $300 billion of foreign goods and foreign buyers purchased $200 billion of U.S. goods, the U.S. balance of trade would be:

	A.	$100 billion.
	B.	$200 billion.
	C.	66.7 percent.
	D.	-$100 billion.

1 points  

Question 34

 

Money owed by borrowers in one country to lenders in another country is termed:

	A.	private debt.
	B.	national debt.
	C.	balance of trade deficit.
	D.	external debt.

1 points  

Question 35

 

Flexible, or floating, exchange rates are determined by:

	A.	the forces of supply and demand.
	B.	the Federal Reserve.
	C.	changes in the price of gold.
	D.	International Monetary Fund agreements.

1 points  

Question 36

 

The balance of trade is:

	A.	equal to the current account balance plus the capital account balance.
	B.	equal to the current account balance minus the capital account balance.
	C.	a component of the capital account.
	D.	a component of the current account.

1 points  

Question 37

 

A government program to create affordable housing for low income families is an example of an economic policy.

True

False

1 points  

Question 38

 

A mixed economy combines government intervention and individual decision making.

True

False

1 points  

Question 39

 

Because of the Law of Supply, a supply curve for a product slopes upward.

True

False

1 points  

Question 40

 

A person who is voluntarily out of work and seeking work is frictionally unemployed.

True

False

1 points  

Question 41

 

Household spending accounts for the largest percentage of total spending.

True

False

1 points  

Question 42

 

The U.S. national debt is more than $9 trillion, and growing.

True

False

1 points  

Question 43

 

The ease of converting an asset to its value in cash or spendable funds is referred to as liquidity.

True

False

1 points  

Question 44

 

The money supply is increased when loans are made by financial depository institutions.

True

False

1 points  

Question 45

 

In the new classical model, aggregate supply is upward sloping in the short run, and perfectly vertical at the natural rate of unemployment in the long run.

True

False

1 points  

Question 46

 

A durable good has a useful lifetime of more than one year.

True

False

1 points  

Question 47

 

Normal profit is an implicit cost of production.

True

False

1 points  

Question 48

 

Short-run variable costs behave as they do because of the Law of Diminishing Returns.

True

False

1 points  

Question 49

 

An individual purely competitive seller's marginal revenue curve is identical to the demand curve for its product.

True

False

1 points  

Question 50

 

Government intervention into the operation of markets eliminates all risks of private decision making in those markets.

True

False

1 points  

Question 51

 

The Law of Diminishing Returns influences a firm's demand for labor over the short run.

True

False

1 points  

Question 52

 

A tariff is a restriction on the quantity of a product that can enter a country.

True

False

1 points  

Question 53

 

The member nations of the European Union have switched over to a common currency called the euro.

True

False

1 points  

Question 54

 

One of the protectionist arguments is that trade restrictions should be imposed to ensure national security.

True

False

1 points  

Question 55

 

The sale of a product in a foreign market at a price below cost is called dumping.

True

False