Question 1

A)

Use the table to answer the question.

	Soybeans	Wheat
Argentina	100 million tons	80 million tons
Bolivia	120 million tons	100 million tons

For which of the following does Bolivia have the absolute advantage in production?

(1 point)

wheat

wheat

soybeans

soybeans

neither product

neither product

wheat and soybeans

wheat and soybeans

Question 2

A) A country can direct all of its resources to the production of either 5,000 computers or 20,000 books. Assuming that no economic growth will occur in the near future, and that the residents of the country want to consume a combination of 3,500 computers and 8,000 books, which of the following is correct?(1 point)

The country could only achieve this through domestic production.

The country could only achieve this through domestic production.

The country could only achieve this through trade.

The country could only achieve this through trade.

The country could not achieve this by any means.

The country could not achieve this by any means.

The country could achieve this through either domestic production or trade.

The country could achieve this through either domestic production or trade.

Question 3

A) Which term refers to a tax on imports?(1 point)

quota

quota

embargo

embargo

tariff

tariff

subsidy

subsidy

Question 4

A) A country currently exports 1 million tons of lumber to the rest of the world. If the government were to impose an export subsidy on lumber, which of the following correctly explains the expected result?(1 point)

The subsidy will increase exports of lumber because it will effectively raise lumber prices for both domestic consumers and domestic producers.

The subsidy will increase exports of lumber because it will effectively raise lumber prices for both domestic consumers and domestic producers.

The subsidy will decrease exports of lumber because it will effectively lower lumber prices for consumers and raise them for producers.

The subsidy will decrease exports of lumber because it will effectively lower lumber prices for consumers and raise them for producers.

The subsidy will decrease exports of lumber because it will effectively raise lumber prices for both domestic consumers and domestic producers.

The subsidy will decrease exports of lumber because it will effectively raise lumber prices for both domestic consumers and domestic producers.

The subsidy will increase exports of lumber because it will effectively lower lumber prices for consumers and raise them for producers.

The subsidy will increase exports of lumber because it will effectively lower lumber prices for consumers and raise them for producers.

Question 5

A) Which of the following describes one purpose of APEC?(1 point)

to regulate equal treatment of member countries

to regulate equal treatment of member countries

to remove border controls among member countries

to remove border controls among member countries

to reduce tariffs among member countries

to reduce tariffs among member countries

to establish a uniform currency used by member countries

to establish a uniform currency used by member countries

Question 6

A) Which of the following correctly explains the relationship between international trade agreements and protectionist trade policies?(1 point)

International trade agreements usually mitigate protectionist trade policies by increasing barriers to trade.

International trade agreements usually mitigate protectionist trade policies by increasing barriers to trade.

International trade agreements usually mitigate protectionist trade policies by reducing barriers to trade.

International trade agreements usually mitigate protectionist trade policies by reducing barriers to trade.

International trade agreements usually support protectionist trade polices by increasing barriers to trade.

International trade agreements usually support protectionist trade polices by increasing barriers to trade.

International trade agreements usually support protectionist trade policies by reducing barriers to trade.

International trade agreements usually support protectionist trade policies by reducing barriers to trade.

Question 7

A) Which of the following is addressed by the USMCA? Select the two correct answers.(1 point)

free travel of labor

free travel of labor

intellectual property rights

intellectual property rights

common currency

common currency

agricultural trade

agricultural trade

border removal

border removal

Question 8

A) Which of the following correctly explains how the dollars-per-euro exchange rate will change in the near future if the exchange rate is expected to rise?(1 point)

The expectation of an appreciating euro increases the supply of euros and decreases the demand for euros on the foreign exchange market. The result is a lower exchange rate in the near future.

The expectation of an appreciating euro increases the supply of euros and decreases the demand for euros on the foreign exchange market. The result is a lower exchange rate in the near future.

The expectation of an appreciating euro increases the demand for euros and decreases the supply of euros on the foreign exchange market. The result is a lower exchange rate in the near future.

The expectation of an appreciating euro increases the demand for euros and decreases the supply of euros on the foreign exchange market. The result is a lower exchange rate in the near future.

The expectation of an appreciating euro increases the supply of euros and decreases the demand for euros on the foreign exchange market. The result is a higher exchange rate in the near future.

The expectation of an appreciating euro increases the supply of euros and decreases the demand for euros on the foreign exchange market. The result is a higher exchange rate in the near future.

The expectation of an appreciating euro increases the demand for euros and decreases the supply of euros on the foreign exchange market. The result is a higher exchange rate in the near future.

The expectation of an appreciating euro increases the demand for euros and decreases the supply of euros on the foreign exchange market. The result is a higher exchange rate in the near future.

Question 9

A) Which of the following measures are used to assess aspects of a population's health? Select the two correct answers.(1 point)

infant mortality rate

infant mortality rate

GDP

GDP

life expectancy

life expectancy

literacy rate

literacy rate

per capita GDP

per capita GDP

Question 10

A) Country A has a GDP of $60,000,000, and Country B has a per capita GDP of $2,000. If the populations of Countries A and B are 40,000 and 20,000, respectively, which country is most developed based on per capita GDP, and why?(1 point)

Country B is more developed because it produces $2,000 per person, while Country A only produces $1,500 per person.

Country B is more developed because it produces $2,000 per person, while Country A only produces $1,500 per person.

Country B is more developed because it produces a GDP of $80,000,000, while Country A only produces $1,500 per person.

Country B is more developed because it produces a GDP of $80,000,000, while Country A only produces $1,500 per person.

Country A is more developed because it produces $1,500 per person, while Country B has a GDP of $40,000,000.

Country A is more developed because it produces $1,500 per person, while Country B has a GDP of $40,000,000.

Country A is more developed because it has a GDP of $60,000,000, while Country B only has a GDP of $40,000,000.

Country A is more developed because it has a GDP of $60,000,000, while Country B only has a GDP of $40,000,000.

Question 11

A) Which of the following explains how foreign portfolio investment contributes to economic development?(1 point)

Domestic investors direct capital to foreign countries through the purchase of land, labor, and physical capital.

Domestic investors direct capital to foreign countries through the purchase of land, labor, and physical capital.

Domestic investors direct capital to foreign countries through loans and grants issued to promote development.

Domestic investors direct capital to foreign countries through loans and grants issued to promote development.

Domestic investors direct capital to foreign countries through the merging of domestic and foreign businesses.

Domestic investors direct capital to foreign countries through the merging of domestic and foreign businesses.

Domestic investors direct capital to foreign countries through the purchase of securities issued by foreign entities.

Domestic investors direct capital to foreign countries through the purchase of securities issued by foreign entities.

Question 12

A) How can a difference inGini coefficients for the United States and China be interpreted?(1 point)

The United States and China differ in how much income is earned by their populations.

The United States and China differ in how much income is earned by their populations.

The United States and China differ in how evenly income is distributed among individuals.

The United States and China differ in how evenly income is distributed among individuals.

The United States and China differ in their access to information technology.

The United States and China differ in their access to information technology.

The United States and China differ in how developed their populations are.

The United States and China differ in how developed their populations are.

Question 13

A) Which of the following trends have followed globalization? Select the two correct answers.(1 point)

greater national sovereignty

greater national sovereignty

an increase in the value of knowledge and information

an increase in the value of knowledge and information

the flourishing of small businesses

the flourishing of small businesses

technological advancement

technological advancement

a rise in world poverty

a rise in world poverty

Question 14

A) If the United States and Canada enter into a trade deal that allows Canada to trade oil to the U.S. and the U.S. to trade auto partsto Canada, who will benefit and who will be at a disadvantage from this deal?(1 point)

The governments of both countries will benefit. Oil producers in the U.S. and auto part manufacturers in Canada will benefit. Oil producers in Canada and auto part manufacturers in the U.S. will be at a disadvantage.

The governments of both countries will benefit. Oil producers in the U.S. and auto part manufacturers in Canada will benefit. Oil producers in Canada and auto part manufacturers in the U.S. will be at a disadvantage.

Consumers in both countries will benefit. Oil producers in Canada and auto part manufacturers in the U.S. will benefit. Oil producers in the U.S. and auto part manufacturers in Canada will be at a disadvantage.

Consumers in both countries will benefit. Oil producers in Canada and auto part manufacturers in the U.S. will benefit. Oil producers in the U.S. and auto part manufacturers in Canada will be at a disadvantage.

The governments of both countries will benefit. Oil producers in Canada and auto part manufacturers in the U.S. will benefit. Oil producers in the U.S. and auto part manufacturers in Canada will be at a disadvantage.

The governments of both countries will benefit. Oil producers in Canada and auto part manufacturers in the U.S. will benefit. Oil producers in the U.S. and auto part manufacturers in Canada will be at a disadvantage.

Consumers in both countries will benefit. Oil producers in the U.S. and auto part manufacturers in Canada will benefit. Oil producers in Canada and auto part manufacturers in the U.S. will be at a disadvantage.

Consumers in both countries will benefit. Oil producers in the U.S. and auto part manufacturers in Canada will benefit. Oil producers in Canada and auto part manufacturers in the U.S. will be at a disadvantage.

Question 15

A) Differentiate foreign investment from the types of aid provided by the UNDP and World Bank, citing specific examples of aid from both.(4 points)

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Short Answer Rubric (4 points)

Points Awarded	Criteria
4	The answer is very clear. The answer is fully supported by details. There may be a few errors in grammar, usage, or mechanics. Errors do not interfere with meaning.
3	The answer is clear. The answer is somewhat supported by details. There area few errors in grammar, usage, or mechanics. Errors may interfere with meaning.
2	The answer is somewhat clear. Details are weak or not related. There are some errors in grammar, usage, and mechanics. Errors interfere with meaning.
1	The answer is not very clear. Details are lacking, weak and/or not related. There are severalgrammar errors. Errors interfere with meaning.
0	The question is not answered.