trident eco202 slp 4 quiz

Question 1 (2 points)

The table below shows the amounts of cloth and cheese that China and Pakistan can produce in an hour.

What is the opportunity cost of 1 cloth for China?

Question 1 options:

a) 8 units of cheese

b) 12 units of cheese

c) 2 units of cheese

d) 16 units of cheese

Question 2 (2 points)

Which statement is true about absolute advantage?

Question 2 options:

a) Pakistan has the absolute advantage in cloth.

b) Pakistan has the absolute advantage in cheese.

c) A country cannot have the absolute advantage in both goods.

d) China has the absolute advantage in both cloth and cheese.

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Question 3 (2 points)

Which statement is true about comparative advantage?

Question 3 options:

a) China has the comparative advantage in producing cloth.

b) China has the comparative advantage in producing cheese.

c) Pakistan has the comparative advantage in producing cloth.

d) None of the above

Question 4 (2 points)

Which country should specialize in cheese according to the principle of opportunity cost?

Question 4 options:

a) Both

b) China

c) Pakistan

d) Neither

Question 5 (2 points)

A tariff is:

Question 5 options:

a) a limit on the amount of a good that can be imported.

b) is where a nation voluntarily decreases its exports in an attempt to avoid more restrictive policies.

c) a tax on imported goods.

d) None of the above

Question 6 (2 points)

Which of the following can limit trade?

Question 6 options:

a) Strict enforcement of health and safety laws

b) Allowing a customs system to be inefficient and sluggish

c) A voluntary restraint where a nation voluntarily decreases its exports in an attempt to avoid more restrictive policies

d) All of the above

Question 7 (2 points)

What are the three possible motivations for policies that restrict trade?

Question 7 options:

a) To maintain a monopoly of the product, to penalize countries that do not adhere to domestic policies, and to restrict cash flow.

b) To shield workers from foreign competition, to close trade with underdeveloped countries, and to monopolize the market.

c) To shield workers from foreign competition, to nurture “infant” industries until they mature, and to help domestic firms establish monopolies in world markets.

d) None of the above

Question 8 (2 points)

The agreement between the United States, Mexico, and Canada that sought to lower trade barriers is known as:

Question 8 options:

a) the World Trade Organization.

b) the General Agreement on Tariffs and Trade.

c) the New World Free Trade Agreement.

d) the North American Free Trade Agreement.

Question 9 (2 points)

The foreign exchange rate is:

Question 9 options:

a) the volume of the world currencies traded.

b) the rate or the speed with which the currencies of the worlds are traded.

c) equal to the amount of the capital account deficit.

d) the price at which one currency exchanges for another.

Question 10 (2 points)

Lower prices in the United States will cause a:

Question 10 options:

a) rightward shift of the demand curve for dollars.

b) rightward shift of the supply curve for dollars.

c) leftward shift of the demand curve for dollars.

d) leftward shift of the supply curve for dollars.

Question 11 (2 points)

Consider the foreign exchange market for Japanese yen and U.S. dollars. Assume a market where the dollars are on the x axis and the exchange rate in yen per dollar is on the y axis. Which of the following events would cause the dollar to depreciate?

Question 11 options:

a) Lower interest rates in Japan

b) Lower prices in Japan

c) Lower prices in the United States

d) Higher U.S. interest rates.

Question 12 (2 points)

A higher exchange rate on exports and imports will:

Question 12 options:

a) lower a country’s balance of trade.

b) increase a country's balance of trade.

c) has no effect on a country's balance of trade.

d) None of the above

Question 13 (2 points)

Currency systems in which governments try to keep constant the values of their currencies against one another are called:

Question 13 options:

a) fixed exchange rate systems.

b) balance of payments deficit.

c) devaluation.

d) None of the above

Question 14 (2 points)

A balance of payments deficit:

Question 14 options:

a) is an excess demand of a country's currency at the fixed exchange rate.

b) is an excess supply of a country's currency at the fixed exchange rate

c) causes the country’s currency to appreciate.

d) does not exist.

Question 15 (2 points)

Which of the following would not be caused by an increase in the value of the U.S. dollar?

Question 15 options:

a) Imports are less expensive for the residents of the United States.

b) Net exports (exports minus imports) increase.

c) Net exports (exports minus imports) decline.

d) U.S. exports are more expensive in world markets.