Question 1(1 point)

Which of the following statement is true?

Question 1 options:

In the late 1990, the US balance of payment was positive.

Over the past 200 years, international trade throughout the world has grown more rapidly than world output.

In 1820, only about 10 percent of world output was exported to foreign markets.

In the late 1990s, the United States exported less than it did 500 years earlier.

Question 2(1 point)

Which of the following is a synonym for "model?"

Question 2 options:

example.

case study.

data set.

theory.

Question 3(1 point)

Immigration

Question 3 options:

is still declining from its high levels of 100 years ago.

has occurred throughout human history.

is an important economic phenomenon in very few countries.

is a recent economic phenomenon that only became possible after the invention of modern means of transportation.

Question 4(1 point)

Saved

According to the definitions of the various payment flows in the open-economy circular flow, total foreign transactions are in balance when

Question 4 options:

(X-IM) + S_F= 0

X = IM

(X-IM) + (S_F+ r_F) + Tr_F= 0

(X-IM) + (S_F+ r_F) > Tr_F

Question 5(1 point)

Which of the following statement is true?

Question 5 options:

a debit shows up as a "+" on the balance of payments.

trade surplus implies X-IM < 0.

the "+" items in the balance of payments are not inherently more "desirable" than the "-" items.

the sale of domestic bonds to a foreign pension fund is a debit on the balance of payments.

Question 6(1 point)

Using the notation defined in your text book, the current account balance of payments can be represented as

Question 6 options:

(X-IM) - Tr_F- r_F.

(X-IM).

(X-IM) - Tr_F.

(X-IM) + Tr_F+ r_F.

Question 7(1 point)

The merchandise trade balance is

Question 7 options:

a component of the financial account.

the net sum of imports and exports of goods and services.

a component of the current account.

the same thing as the current account.

Question 8(1 point)

Which of the following belongs in the financial account of the balance of payments?

Question 8 options:

Merchandise imports.

Net change in foreign securities held in the U.S.

Net inflow of international transfers.

Net inflow of returns on assests.

Question 9(1 point)

The international investment position of the United States during the 1980s

Question 9 options:

went from positive to negative.

went from negative to positive.

fluctuated randomly.

remained unchanged.

Question 10(1 point)

The purchase of a ticket on Southwest Airlines, a U.S. airline, by a French tourist traveling to Las Vegas to see the Eiffel Tower at the Paris Casino appears in the U.S.balance of payments as a

Question 10 options:

service import.

service export.

debit.

unilateral transfer.

Question 11(1 point)

Saved

The foreign exchange rate

Question 11 options:

is always stated as the domestic currency price of foreign money.

is always given in terms of U.S. dollars.

is always stated as the foreign currency price of the domestic money.

can be stated as either the foreign currency price of the domestic money or as the domestic currency price of foreign money.

Question 12(1 point)

An example of indirect production of automobiles is

Question 12 options:

the growing of corn in Nebraska.

the production of pharmaceuticals in New Jersy.

the production of movies in Hollywood.

all of the above.

Question 13(1 point)

In comparing direct production and indirect production, which method is better?

Question 13 options:

They cannot be compared because they involve different products.

Whichever method came first.

Whichever way has the lowest opportunity cost.

The one that is local.

Question 14(1 point)

The following is a property of indifference curves

Question 14 options:

they slope downward from left to right.

they can intersect.

their slope is always constant.

they are concave to (they bow out from) the origin.

Question 15(1 point)

According to the general equilibrium PPF/Indifference curve model, a country's gains from international trade can be split into

Question 15 options:

the gains from exchange and the gains from specialization.

the gains from exchange and the gains from productivity loss.

the gains from exchange and the gains from growth.

the gains from specialization and the gains from protection.

Question 16(1 point)

The small country general equilibrium model of international trade pointed out that

Question 16 options:

producers will not specialize in the production of any good since there is no gain from specialization.

a country will tend to export the goods that are relatively cheap at home, compared to overseas prices, and import the goods that are relatively expensive at home.

producers will specialize and produce more of the goods that, compared to world prices, were relatively expensive at home and fewer of the goods that were relatively cheap.

whenever the relative prices of goods are the same, countries can potentially enhance national welfare by engaging in exchange, but they cannot gain from specialization.

Question 17(1 point)

The small country general equilibrium (PPF/indifference curve model) of international trade brought out a number of important points, among which is/are

Question 17 options:

after international trade is carried out to its fullest potential, domestic prices will become lower than international prices.

the shift from self sufficiency to free trade decreases the economy's real output but it lowers the prices of everything so that it seems as though real income increases.

after international trade is carried out to its fullest potential, domestic prices will become higher than international prices.

the gains from exchange are the result of domestic consumers replacing more expensive domestic products by relatively cheaper foreign products.

Question 18(1 point)

Which of the following doesnotaccurately describe the international investment position?

Question 18 options:

It measures the net stock of foreign-owned domestic assets.

It is a measure of the country's net stock of overseas assets, measured at a certain moment in time.

It measures the net stock of domestically-owned foreign assets and foreign-owned domestic assets.

It is a compilation of flows of payments over a period of time, usually a year.

Question 19(1 point)

The small country general equilibrium (PPF/indifference curves) model shows that when the small country engages in international trade:

Question 19 options:

the small country reaches higher indifference curve.

small country consumers enjoy combinations of products that are simply not attainable without trade.

the small country specializes in producing the products in which it enjoys a comparative advantage.

all of the above.

Question 20(1 point)

Increasing returns to scale can help explain

Question 20 options:

Intra-industry trade.

Comparative advantage.

Observed trade pattern.

all of the above.

Question 21(1 point)

In the case of free trade, a small economy's

Question 21 options:

consumption point cannot lie outside its production possibilities frontier.

production point must lie on or inside its production possibilities frontier.

production point must lie inside its production possibilities frontier.

consumption point must lie inside its production possibilities frontier.

Question 22(1 point)

The value of the marginal rate of transformation (MRT) is given by

Question 22 options:

the slope of the world price line.

the slope of the indifference curve.

the slope of the domestic price line.

the slope of the production possibilities frontier.

Question 23(1 point)

The value of the marginal rate of substitution (MRS) is given by

Question 23 options:

the slope of the production possibilities frontier.

the slope of the world price line.

the slope of the domestic price line.

the slope of the indifference curve.

Question 24(1 point)

The small country general equilibrium (PPF/indifference curves) model illustrates that whenever relative prices of goods are not the same at home and abroad,

Question 24 options:

specialization without engaging in international trade can enhance national welfare.

specialization and international trade have no effect on national welfare.

specialization and international trade can enhance national welfare.

specialization and international trade can lower national welfare.

Question 25(1 point)

International trade and economic growth

Question 25 options:

both have no welfare effects.

both cause the relative prices of goods to change in an identical fashion.

can have similar welfare effects.

both cause the productions-possibilities frontier to shift out.