devry eco312 week 7 quiz

Quiz

Question 1.1. (TCO 8) Countries engaged in international trade specialize in production based on (Points : 1)

relative levels of GDP.

comparative advantage.

relative exchange rates.

relative inflation rates.

Question 2.2. (TCO 8) Suppose the United States sets a limit on the number of tons of sugar that can be imported each year. This is an example of a(n) (Points : 1)

protective tariff.

revenue tariff.

voluntary export restriction.

import quota.

Question 3.3. (TCO 9) Which of the following is not included in the current account of a nation's balance of payments? (Points : 1)

Its goods exports

Its goods imports

Its net investment income

Its purchases of real assets abroad

Question 4.4. (TCO 9) Appreciation of the Canadian dollar will (Points : 1)

intensify an existing disequilibrium in Canada's balance of payments.

make Canada's exports less expensive and its imports more expensive.

make Canada's exports more expensive and its imports less expensive.

make Canada's exports and imports both more expensive.

Question 5.5. (TCO 9) In terms of individual nations, the largest U.S. trade deficit is with (Points : 1)

Japan.

Mexico.

China.

Canada.

Question 6.6. (TCO 9) Answer the next question(s) on the basis of the following table which indicates the dollar price of libras, the currency used in the hypothetical nation of Libra. Assume that a system of freely floating exchange rates is in place.

(1)

Quantity of Libras Demanded (billions)

(2)

Dollar Price of Libras

(3)

Quantity of Libras Supplied (billions)

100

200

300

400

$5

4

3

2

325

200

100

75

The equilibrium dollar price of libras is (Points : 1)

$5.

$4.

$3.

$2.

Question 7.7. (TCO 8) Other things equal, economists would prefer (Points : 1)

free trade to tariffs and tariffs to import quotas.

free trade to import quotas and import quotas to tariffs.

import quotas to tariffs and tariffs to voluntary export restrictions.

import quotas to free trade and free trade to tariffs.

Question 8.8. (TCO 8) Refer to the graphs below. Terryville has a comparative advantage in producing

Graph Description

(Points : 1)

Product A.

Product B.

both Product A and B.

neither Product A nor B.

Question 9.9. (TCO 9) Which one of the following is not one of the so-called G8 Nations? (Points : 1)

Japan

Canada

United States

China

Question 10.10. (TCO 8) As a percentage of GDP, U.S. exports are (Points : 1)

greater than U.S. imports.

about 20 percent.

considerably lower than in several other industrially advanced nations.

higher than in Canada but lower than Germany.

Question 11. 11. (TCO 8 and 10) Evaluate the statement: “Restricting imports from other nations will save U.S. jobs.” Include both advantages and disadvantages in you argument. (Points : 5)

Question 12. 12. (TCO 9) What effect might the depreciation of the U.S. dollar relative to the Japanese yen have on imports and exports to and from each country? (Points : 5)