Question 1

-Refer to the above diagrams. Which of the following is a feasible rate at which X and Y might be exchanged?

Accepted Answer

A)   1X for 3Y
B)   1X for 1.5Y
C)   1X for 2.5Y
D)   1X for .5YE) All of the above
F) A) and B)

Question 2

Nation A pays lower wages to workers than nation B. Nation A also uses fewer capital goods per worker than nation B. This suggests that gains from trade are likely to result if:

Accepted Answer

A)   nation A produces products that are more capital-intensive and exports them to nation B in return for products from nation B that are more labor-intensive.
B)   nation A produces products that are more labor-intensive and exports them to nation B in return for products from nation B that are more capital-intensive.
C)   nation B produces products that are more labor-intensive and exports them to nation A in return for products from nation A that are more capital-intensive.
D)   nations A and B each produces capital-intensive and labor-intensive goods and trades them with each other.E) C) and D)
F) B) and C)

Question 3

The domestic opportunity cost of producing a television in the United States is 20 bushels of wheat. In Korea, the domestic opportunity cost of producing a television is 10 bushels of wheat. In this case:

Accepted Answer

A)   Korea has a comparative advantage in the production of wheat.
B)   the United States has a comparative advantage in the production of televisions.
C)   mutual gains from trade can be obtained if the United States imports televisions from Korea and Korea imports wheat from the United States.
D)   mutual gains from trade can be obtained if the United States imports wheat from Korea and Korea imports televisions from the United States.E) A) and B)
F) A) and C)

Question 4

Which of the following statements is most accurate about the euro?

Accepted Answer

A)   It is the common currency used by all the nations of the European Union (EU) .
B)   The United Kingdom gave up the euro with the "Brexit" vote of 2016.
C)   It has equalized prices across the EU nations that use the currency.
D)   It has facilitated trade between the EU countries that have adopted the currency.E) A) and B)
F) A) and D)

Question 5

Which of the following is not an implication of large U.S. trade deficits?

Accepted Answer

A)   The nation must consume within its production possibilities curve.
B)   U.S. productivity is falling.
C)   Deficits cause the U.S. dollar to depreciate.
D)   All of these are implications of large trade deficits.E) A) and B)
F) A) and C)

Question 6

Which is a valid counterargument to the call for higher tariffs to save U.S. jobs?

Accepted Answer

A)   Nations adversely affected by such tariffs are likely to retaliate, causing a costly trade barrier war.
B)   U.S. firms and workers must be shielded from the competitive practices of foreign businesses.
C)   Strategic trade policy calls for trading nations to erect trade barriers so that they will have the same competitive conditions.
D)   They are needed to protect U.S. workers from poor enforcement of labor standards in other nations.E) A) and B)
F) A) and C)

Question 7

What is one of the major shortcomings of using tariffs or quotas to "save American jobs"?

Accepted Answer

A)   Trade barriers protect the development of new technology, but the new technology eliminates jobs.
B)   Import restrictions alter the composition of domestic employment, but they have minimal effect on the amount of domestic employment.
C)   The volume of trade with other nations is limited to a few industries, so trade restrictions would not increase national employment.
D)   Major American firms have produced many products in other countries, and would not hire more domestic labor when trade barriers are imposed.E) A) and B)
F) None of the above

Question 8

A given unit of resource inputs produces 400 tons of corn or 200 tons of soybeans in nation A, and 300 tons of corn or 100 tons of soybeans in nation B. Which of the following is correct?

Accepted Answer

A)   The domestic opportunity cost of corn is lower in nation A than in nation B.
B)   Nation A has a comparative advantage in soybeans.
C)   There are no gains from trade between nation A and nation B.
D)   The terms of trade favor nation A.E) A) and C)
F) C) and D)

Exam 16: International Trade and Exchange Rates

Which of the following statements is most accurate about the euro?

Correct Answer
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Which of the following is not an implication of large U.S. trade deficits?

Correct Answer
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Nation A pays lower wages to workers than nation B. Nation A also uses fewer capital goods per worker than nation B. This suggests that gains from trade are likely to result if:

Correct Answer
verified

What is one of the major shortcomings of using tariffs or quotas to "save American jobs"?

Correct Answer
verified

-Refer to the above diagrams. Which of the following is a feasible rate at which X and Y might be exchanged?

Correct Answer
verified

The domestic opportunity cost of producing a television in the United States is 20 bushels of wheat. In Korea, the domestic opportunity cost of producing a television is 10 bushels of wheat. In this case:

Correct Answer
verified

Which is a valid counterargument to the call for higher tariffs to save U.S. jobs?

Correct Answer
verified

A given unit of resource inputs produces 400 tons of corn or 200 tons of soybeans in nation A, and 300 tons of corn or 100 tons of soybeans in nation B. Which of the following is correct?

Correct Answer
verified

Exam 16: International Trade and Exchange Rates

Which of the following statements is most accurate about the euro?

Correct AnswerverifiedShow Answer

Which of the following is not an implication of large U.S. trade deficits?

Correct AnswerverifiedShow Answer

Nation A pays lower wages to workers than nation B. Nation A also uses fewer capital goods per worker than nation B. This suggests that gains from trade are likely to result if:

Correct AnswerverifiedShow Answer

What is one of the major shortcomings of using tariffs or quotas to "save American jobs"?

Correct AnswerverifiedShow Answer

-Refer to the above diagrams. Which of the following is a feasible rate at which X and Y might be exchanged?

Correct AnswerverifiedShow Answer

The domestic opportunity cost of producing a television in the United States is 20 bushels of wheat. In Korea, the domestic opportunity cost of producing a television is 10 bushels of wheat. In this case:

Correct AnswerverifiedShow Answer

Which is a valid counterargument to the call for higher tariffs to save U.S. jobs?

Correct AnswerverifiedShow Answer

A given unit of resource inputs produces 400 tons of corn or 200 tons of soybeans in nation A, and 300 tons of corn or 100 tons of soybeans in nation B. Which of the following is correct?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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