MST8 If a country sells more goods and services abroad than it purchases from foreign countries, then its exports are:

a.

smaller than its imports, and its net exports are positive

b.

greater than its imports, and its net exports are negative

c.

smaller than its imports, and its net exports are negative

d.

greater than its imports, and its net exports are positive

MST9 A trade surplus occurs when:

a.

tariffs exceed quotas

b.

exports exceed imports

c.

quotas exceed tariffs

d.

imports exceed exports

MST10 Appreciation of a currency will lead to:

a.

an increase in exports and an increase in imports

b.

a decrease in exports and an increase in imports

c.

a decrease in exports and an decrease in imports

d.

an increase in exports and a decrease in imports

MST 11 Purchasing-power parity describes the forces that determine:

a.

prices in the short run

b.

prices in the long run

c.

exchange rates in the long run

d.

exchange rates in the short run

MST12 The nominal exchange rate is the real exchange rate adjusted for the:

a.

income level in the domestic country

b.

income levels in the two countries

c.

price level in the domestic country

d.

price levels in the two countries