Question 1

The United States-China bilateral trade balance may overstate the trade gap if:

Accepted Answer

A)   some of the inputs used to produce Chinese exports are imported.
B)   none of the inputs used to produce Chinese exports are imported.
C)   Chinese exports are valued in the United States versus Chinese currency.
D)   the United States imposes trade restrictions on Chinese imports.E) A) and B)
F) A) and D)

Question 2

What caused the decline in trade during the 2008-09 financial crisis?

Accepted Answer

A)   rising house prices, which took up more consumer income
B)   decreased demand during the crisis
C)   greater productivity in the developing countries
D)   pirate activity off the coast of AfricaE) B) and C)
F) A) and C)

Question 3

Which of the following ratios is used to measure a country's openness to international trade?

Accepted Answer

A)   the ratio of its exports to its GDP
B)   the ratio of its imports to its GDP
C)   the ratio of its trade balance (exports minus imports)  to its GDP
D)   the ratio of its exports plus imports to its GDPE) A) and B)
F) B) and C)

Question 4

If a country's GDP is $10 trillion and its overall trade flows are $2 trillion (exports plus imports) , then:

Accepted Answer

A)   its trade-to-GDP ratio is 20%.
B)   it is not a successful country.
C)   its GDP needs to increase.
D)   its trade-to-GDP ratio is too high.E) C) and D)
F) A) and C)

Question 5

Currently, which of the following countries is the world's largest exporter of goods (in dollar volume) ?

Accepted Answer

A)   China
B)   the United States
C)   Japan
D)   GermanyE) A) and C)
F) B) and D)

Question 6

Which of the following statements explains why Asian countries such as China and Vietnam export goods to industrialized countries?

Accepted Answer

A)   Workers in China and Vietnam receive low wages.
B)   Workers are more productive in China and Vietnam than in industrialized countries.
C)   China and Vietnam have an abundant supply of raw materials.
D)   Chinese and Vietnamese factories are more technologically advanced than those in industrialized countries.E) A) and B)
F) A) and C)

Question 7

Other nations responded to the Smoot-Hawley tariff by:

Accepted Answer

A)   complaining to the United Nations.
B)   raising tariffs on imports in retaliation.
C)   lowering prices on exports in order to increase sales.
D)   attacking military bases in nations that refused to lower tariffs.E) B) and C)
F) None of the above

Question 8

Europe and the United States accounted for ______ of world exports in 2014.

Accepted Answer

A)   20%
B)   15%
C)   80%
D)   50%E) A) and C)
F) A) and B)

Question 9

Most foreign direct investment among industrialized countries is:

Accepted Answer

A)   vertical FDI.
B)   horizontal FDI.
C)   industrial FDI.
D)   reverse-vertical FDI.E) B) and D)
F) B) and C)

Question 10

When a foreign resident purchases a good or service from someone in the United States, the transaction is:

Accepted Answer

A)   a U.S. export.
B)   a U.S. import.
C)   bilateral exchange.
D)   a compensating differential.E) B) and C)
F) None of the above

Question 11

Which of the following statements best explains the low level (about $35 billion)  of trade between the United States and Russia?

Accepted Answer

A)   Russia doesn't produce goods that Americans want to buy.
B)   The Russian market is smaller than the markets of most other countries.
C)   Political tensions between Russia and the United States reduce the level of trade between the two countries.
D)   The United States has banned food imports from Russia.E) C) and D)
F) A) and C)

Question 12

One factor mentioned in the text as a reason for the "first golden age" of trade was:

Accepted Answer

A)   the invention of the cotton gin.
B)   the invention of the wheel.
C)   improved methods of transporting goods.
D)   the invention of the computer.E) A) and C)
F) All of the above

Question 13

Until recently, labor could freely move from one country to another within the EU. However, some EU countries now place restrictions on migrants from new EU members. Why have these countries done so?

Accepted Answer

The freedom of movement for workers is o...

Question 14

Which of the following is an example of trade of goods, otherwise known as trade flow?

Accepted Answer

A)   Robert Feenstra purchases $100 million of British treasury bonds.
B)   Robert Feenstra purchases a yogurt factory in France.
C)   Robert Feenstra purchases a British-made Range Rover.
D)   Robert Feenstra purchases 100 shares of Novartis AG, a Swiss pharmaceutical company.E) A) and D)
F) C) and D)

Question 15

If we measure the ratio of total trade to GDP, which of the following nations had the highest ratio in 2014?

Accepted Answer

A)   Hong Kong (China) 
B)   Japan
C)   Germany
D)   the United StatesE) A) and C)
F) None of the above

Question 16

After 1945, world trade:

Accepted Answer

A)   grew more slowly than in the decade before World War II.
B)   grew more rapidly than in the decade before World War II.
C)   grew in absolute dollar terms but not as a ratio of GDP.
D)   fell both in absolute and relative terms.E) B) and D)
F) B) and C)

Question 17

An American tourist buys a ticket to an opera in Paris. The U.S. government classifies this transaction as:

Accepted Answer

A)   a goods' import of a French Opera.
B)   a service export.
C)   a service import.
D)   a goods' export.E) A) and B)
F) C) and D)

Question 18

What was an eventual outcome of the Smoot-Hawley tariff enacted by the United States?

Accepted Answer

A)   a renewed effort to reestablish international trade and the flow of payments via new international organizations
B)   a focus on environmental and labor problems caused by trade
C)   a renewed emphasis on gold as a means of payment
D)   flows of foreign aid to low-income nationsE) B) and C)
F) B) and D)

Question 19

Which of the following is NOT classified as horizontal FDI?

Accepted Answer

A)   NUCOR, a U.S. steel manufacturer, purchases an iron ore mine in Australia.
B)   BMW, a German auto manufacturer, constructs an auto assembly plant in South Carolina.
C)   Burger King, an American fast food chain, buys Canadian fast-food chain Tim Horton's.
D)   General Motors, an American auto manufacturer, constructs an auto assembly plant in Toronto, Canada.E) A) and B)
F) A) and C)

Question 20

Imports are:

Accepted Answer

A)   goods or services purchased from a foreign resident.
B)   goods or services sold to foreign residents.
C)   goods only purchased from foreigners-you cannot purchase services from foreigners.
D)   services only-imports do not include goods.E) None of the above
F) All of the above

Exam 1: Trade in the Global Economy

What was an eventual outcome of the Smoot-Hawley tariff enacted by the United States?

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If a country's GDP is $10 trillion and its overall trade flows are $2 trillion (exports plus imports) , then:

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Until recently, labor could freely move from one country to another within the EU. However, some EU countries now place restrictions on migrants from new EU members. Why have these countries done so?

Correct AnswerAnswered by ExamLex AIThe freedom of movement for workers is o...View AnswerShow Answer

Which of the following is an example of trade of goods, otherwise known as trade flow?

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Which of the following statements explains why Asian countries such as China and Vietnam export goods to industrialized countries?

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Currently, which of the following countries is the world's largest exporter of goods (in dollar volume) ?

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If we measure the ratio of total trade to GDP, which of the following nations had the highest ratio in 2014?

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What caused the decline in trade during the 2008-09 financial crisis?

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Which of the following is NOT classified as horizontal FDI?

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Europe and the United States accounted for ______ of world exports in 2014.

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When a foreign resident purchases a good or service from someone in the United States, the transaction is:

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An American tourist buys a ticket to an opera in Paris. The U.S. government classifies this transaction as:

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Which of the following ratios is used to measure a country's openness to international trade?

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Other nations responded to the Smoot-Hawley tariff by:

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After 1945, world trade:

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Imports are:

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Most foreign direct investment among industrialized countries is:

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The United States-China bilateral trade balance may overstate the trade gap if:

Correct AnswerverifiedShow Answer

One factor mentioned in the text as a reason for the "first golden age" of trade was:

Correct AnswerverifiedShow Answer

Which of the following statements best explains the low level (about $35 billion) of trade between the United States and Russia?

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The freedom of movement for workers is o...
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