devry econ 312 week 7 quiz

(TCO 8) Specialization and trade between individuals or between nations lead to:

Greater self-sufficiency

Higher product prices

Lower living standards

Higher total output

Question 2. Question :

(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)

protective tariff.

revenue tariff.

voluntary export restriction.

import quota.

Question 3. Question :

(TCO 9) Which of the following is not included in the current account of a nation's balance of payments?

Its goods exports

Its goods imports

Its net investment income

Its purchases of real assets abroad

Question 4. Question :

(TCO 9) If the dollar price of the yen rises, then

the yen price of dollars also rises.

the dollar depreciates relative to the yen.

the yen depreciates relative to the dollar.

the dollar will buy fewer U.S. goods.

Question 5. Question :

(TCO 9) In recent years, the United States has had large

current account surpluses.

capital and financial account deficits.

balance-of-trade deficits.

balance-of-payments surpluses.

Question 6. Question :

(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

Student Answer: $5.

$4.

$3.

$2.

Question 7. Question :

(TCO 8) The primary gain from international trade is

increased employment in the domestic-export sector.

more goods than would be attainable through domestic production alone.

tariff revenue.

increased employment in the domestic-import sector.

Question 8. Question :

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

Graph Description

Product A.

Product B.

both Product A and B.

neither Product A nor B.

Question 9. Question :

(TCO 9) The Group of Eight (G8) Nations which periodically have jointly intervened to influence the value of the dollar include

Canada, U.S., France, Britain, Russia, Mexico, Germany, and Brazil.

Canada, U.S., France, Japan, Italy, Germany, Russia, and Great Britain.

Canada, U.S., Mexico, Brazil, Argentina, Peru, Uruguay, and Chile.

Italy, France, Britain, Germany, Netherlands, Norway, Russia, and Sweden.

Question 10. Question :

(TCO 8) As a percentage of GDP, U.S. exports are

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. Question :

(TCO 8 and 10) Explain some of problems with the argument that trade protection is needed to protect American jobs.

12

(TCO 9) What are the economic effects of a depreciation of the US dollar on US trade balances?

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