The accompanying tables give production possibilities data for Gamma and Sigma. All data are In tons. Gamma's production possibilities A B C D E 02:29:49 Tea 120 90 60 30 Pots 30 60 120 Sigma's production possibilities A B C D E Tea 30 20 10 Pots 30 90 120 On the basis of this Information, Multiple Choice O Gamma should export both tea and pots to Sigma. O Sigma should export tea to Gamma, and Gamma should export pots to Sigma. O Gamma should export tea to Sigma, and Sigma should export pots to Gamma. O Gamma should export tea to Sigma, but it will not be profitable for the two nations to exchange pots.2 Countries engaged in International trade specialize in production based on Multiple Choice 02:29:35 O relative levels of GDP. O comparative advantage. O relative exchange rates. O relative Inflation rates.3 Tariffs create larger gains to domestic producers than losses to domestic consumers. True or False 02-29:24 True False4 In considering the market for yen and dollars, when the dollar depreciates, Multiple Choice 02.29:14 O the yen appreciates. O the yen will also depreciate. O the yen may either appreciate or depreciate. O U.S. net exports to Japan will fall.5 What are the effects on U.S. Imports and exports when the U.S. experiences economic growth stronger than its major trading partners? Multiple Choice 02:29:01 O U.S. Imports will increase more than U.S. exports. O U.S. exports will increase more than U.S. Imports. O U.S. Imports will decrease, but U.S. exports will Increase. O There will be no effect on U.S. Imports and exports.6 Appreciation of the Canadian dollar will Multiple Choice 02.28:48 O Intensify an existing disequilibrium In Canada's balance of payments. O make Canada's exports less expensive and Its Imports more expensive. O make Canada's exports more expensive and its Imports less expensive. O make Canada's exports and Imports both more expensive.7 (1) US Goods Exports +$ 100 (2) US Goods Imports -$75 3) US Service Exports +40 (4) US Service Imports -90 X 02-28:36 (5) Net Investment Income +20 (6) Net Transfers -15 (7) Foreign Purchases of Assets in the United States +30 (8) US Purchases of Foreign Assets Abroad -$15 (9) Balance on Capital Account +5 The table contains hypothetical data for the U.S. balance of payments. All figures are In billions of dollars. The United States has a balance of goods Multiple Choice O surplus of $25 billion. O deficit of $15 billion. O surplus of -$25 billion. O deficit of $175 billion.8 What Is one of the major shortcomings of using tariffs or quotas to "save American Jobs"? Multiple Choice X 02.28:18 O Trade barriers protect the development of new technology. but the new technology eliminates Jobs. O Import restrictions alter the composition of domestic employment, but they have minimal effect on the overall level of domestic employment. O The volume of trade with other nations is limited to a few industries, so trade restrictions would not Increase national employment. O Major American firms have produced many products In other countries and would not hire more domestic labor when trade barriers are Imposed.Suppose the domestic price (no-International-trade price) of copper is $1.20 a pound in the United States while the world price is $1.00 a pound. Assuming no transportation costs, the United States will 9 Multiple Choice 02.28:06 O have a domestic surplus of copper. O export copper. O Import copper. O neither export nor Import copper.10 $2.50 2.00 1.50 Price X 02-27:53 1.00 0.50 Da 0 100 200 300 400 500 600 Quantity Refer to the graph, which shows the domestic demand and supply curves for a specific product in a hypothetical nation called Econland. If the world price for this product is $2.50, then Econland will Multiple Choice O export 400 units. O export 600 units. O Import 400 units. O not export any units.11 French and German farmers wanting to buy equipment from an American manufacturer based in the U.S. will be Multiple Choice 02:27:41 O supplying dollars and also supplying euros In the foreign exchange market. O demanding dollars and also demanding euros In the foreign exchange market. O supplying dollars and demanding euros in the foreign exchange market. O supplying euros and demanding dollars In the foreign exchange market.12 Common arguments often raised to justify trade barriers Include the following, except Multiple Choice OZ-27:28 O the need to protect foreign producers. O the need for protecting against dumping. O the need for military self-sufficiency. O to diversify for stability.13 U.S. goods exports +$ 390 U.S. goods imports -498 U.S. service exports +133 U.S. service imports -107 Net investment income +12 X 02-27:13 Net transfers -22 Capital account -5 Foreign purchases of U.S. assets +156 U.S. purchases of foreign assets -59 The accompanying table contains hypothetical data for the U.S. balance of payments In a year. All figures are in billions of dollars. The balance of trade In goods and services was a(n) Multiple Choice O $82 billion deficit. O $107 billion surplus. O $115 billion deficit. O $55 billion surplus.14 Which of the following is an example of a capital-Intensive commodity? Multiple Choice X 02:27:00 O clothing O wool O sunflower seeds O chemicals15 If countries A and B produce only either rubber bands or paper clips, their maximum outputs are shown in the accompanying production possibilities schedules. In country B the opportunity cost of 1 paper clip Is Country Rubber Bands Paper Clips A 40 80 B 10 40 02-26:47 Multiple Choice O .25 rubber band. O 4 rubber bands. O 1 rubber band. O 10 rubber bands.16 Which of the following would call for outflows of money from the United States? Multiple Choice 02:26:30 O The United States exports computer software. O The United States purchases assets abroad. O Foreigners purchase assets In the United States. O Foreign tourists spend money In the United States.17 If a U.S. Importer can purchase 10,000 British pounds for $35,000, the rate of exchange Is Multiple Choice 02-26:14 O $3.50 =1 British pound In the United States. O $1 = 3.5 British pounds In the United States. O $0.50 = 1 British pound In Great Britain. O $1 = 0.5 British pound In Great Britain.18 When a quota on a product is applied, this policy action Multiple Choice 02:26:01 O raises the domestic price of the product. O lowers the price for consumers. O generates revenue for the government. O none of these answers are correct.19 "International trade" refers to Multiple Choice 02.25:49 O purchasing or selling currently produced goods or services across an International border. O any transaction across an International border. O any financial transaction across an International border. O buying or selling of preexisting assets across an International border.20 A market In which the money of one nation is exchanged for the money of another nation is a Multiple Choice 02-25:37 O resource market. O bond market. O stock market. O foreign exchange market