Question 1

Cost-benefit analysis of international trade

Accepted Answer

A)   is basically useless.
B)   is empirically intractable.
C)   focuses attention primarily on conflicts of interest within countries.
D)   focuses attention on conflicts of interest between countries.
E)   never leads to government intervention in international trade.F) D) and E)
G) B) and E)

Question 2

In 1998 an economic and financial crisis in South Korea caused it to experience

Accepted Answer

A)   a surplus in their balance of payments.
B)   a deficit in their balance of payments.
C)   a balanced balance of payments.
D)   an unbalanced balance of payments.
E)   a lull in international trade.F) A) and B)
G) A) and C)

Question 3

The GATT was

Accepted Answer

A)   an international treaty.
B)   an international U.N. agency.
C)   an international IMF agency.
D)   a U.S. government agency.
E)   a collection of tariffs.F) B) and C)
G) A) and E)

Question 4

International Economists cannot discuss the effects of international trade or recommend changes in government policies toward trade with any confidence unless they know

Accepted Answer

A)   their theory is the best available.
B)   their theory is internally consistent.
C)   their theory passes the "reasonable person" legal criteria.
D)   their theory is good enough to explain the international trade that is actually observed.
E)   their theory accounts for China's unique position in international trade.F) A) and D)
G) C) and D)

Question 5

Benefits of international trade are

Accepted Answer

A)   limited to tangible goods.
B)   limited to intangible goods.
C)   limited to all goods but not services.
D)   limited to services.
E)   not limited to any of the above categories.F) A) and E)
G) B) and D) E

Question 6

Historians of economic thought often describe ________ written by ________ and published in ________ as the first real exposition of an economic model.

Accepted Answer

A)   "Of the Balance of Trade," David Hume, 1776
B)   "Wealth of Nations," David Hume, 1758
C)   "Wealth of Nations," Adam Smith, 1758
D)   "Wealth of Nations," Adam Smith, 1776
E)   "Of the Balance of Trade," David Hume, 1758F) D) and E)
G) None of the above

Question 7

The United States is less dependent on trade than most other countries because

Accepted Answer

A)   the United States is a relatively large country with diverse resources.
B)   the United States is a "Superpower."
C)   the military power of the United States makes it less dependent on anything.
D)   the United States invests in many other countries.
E)   many countries invest in the United States.F) D) and E)
G) None of the above

Question 8

Ancient theories of international economics from the 18th and 19th Centuries are

Accepted Answer

A)   not relevant to current policy analysis.
B)   are only of moderate relevance in today's modern international economy.
C)   are highly relevant in today's modern international economy.
D)   are the only theories that actually relevant to modern international economy.
E)   are not well understood by modern mathematically oriented theorists.F) B) and D)
G) A) and C) C

Question 9

How are the patterns of international trade, that is the pattern of what different countries export and import, explained?

Accepted Answer

Climate explains why Brazil exports coff...

Question 10

A fundamental problem in international economics is how to produce

Accepted Answer

A)   a perfect degree of monetary harmony.
B)   an acceptable degree of harmony among the international trade policies of different countries.
C)   a world government that can harmonize trade and monetary policies
D)   a counter-cyclical monetary policy so that all countries will not be adversely affected by a financial crisis in one country.
E)   a worldwide form of currency.F) B) and E)
G) All of the above

Question 11

If there are large disparities in wage levels between countries, then

Accepted Answer

A)   trade is likely to be harmful to both countries.
B)   trade is likely to be harmful to the country with the high wages.
C)   trade is likely to be harmful to the country with the low wages.
D)   trade is likely to be harmful to neither country.
E)   trade is likely to have no effect on either country.F) A) and E)
G) A) and D)

Question 12

Who sells what to whom

Accepted Answer

A)   has been a major preoccupation of international economics.
B)   is not a valid concern of international economics.
C)   is not considered important for government foreign trade policy since such decisions are made in the private competitive market.
D)   is determined by political rather than economic factors.
E)   is less important than international economic theory.F) C) and D)
G) A) and C)

Question 13

During the first three years of its existence, the euro

Accepted Answer

A)   depreciated against the $U.S.
B)   maintained a strict parity with the $U.S.
C)   strengthened against the $U.S.
D)   proved to be an impossible dream.
E)   exported exclusively to the U.S.F) C) and D)
G) D) and E)

Question 14

An important insight of international trade theory is that when countries exchange goods and services one with the other it

Accepted Answer

A)   is always beneficial to both countries.
B)   is usually beneficial to both countries.
C)   is typically beneficial only to the low wage trade partner country.
D)   is typically harmful to the technologically lagging country.
E)   tends to create unemployment in both countries.F) A) and C)
G) A) and B)

Question 15

The balance of payments has become a central issue for the United States because

Accepted Answer

A)   when the balance of payments is not balanced, society is unbalanced.
B)   the U.S. economy cannot grow when the balance of payments is in deficit.
C)   the U.S. has run huge trade deficits in every year since 1982.
D)   the U.S. never experienced a surplus in its balance of payments.
E)   the U.S. once ran a large trade surplus of about $40 billion.F) B) and E)
G) B) and D)

Question 16

The study of exchange rate determination is a relatively new part of international economics, since,

Accepted Answer

A)   for much of the past century, exchange rates were fixed by government action.
B)   the calculations required for this were not possible before modern computers became available.
C)   economic theory developed by David Hume demonstrated that real exchange rates remain fixed over time.
D)   dynamic overshooting asset pricing models are a recent theoretical development.
E)   the exchange rate never fluctuates.F) C) and E)
G) B) and D)

Question 17

International economics can be divided into two broad sub-fields

Accepted Answer

A)   macro and micro.
B)   developed and less developed.
C)   monetary and barter.
D)   international trade and international money.
E)   static and dynamic.F) B) and C)
G) A) and B)

Question 18

International economics ________ use the same fundamental methods of analysis as other branches of economics, because ________.

Accepted Answer

A)   does not, the level of complexity of international issues is unique
B)   does not, the interactions associated with international economic relations is highly mathematical
C)   does not, international economics takes a different perspective on economic issues
D)   does not, international economic policy requires cooperation with other countries
E)   does, the motives and behavior of individuals are the same in international trade as they are in domestic transactionsF) All of the above
G) C) and E) E

Question 19

International monetary analysis focuses on

Accepted Answer

A)   the real side of the international economy.
B)   the international trade side of the international economy.
C)   the international investment side of the international economy.
D)   the issues of international cooperation between Central Banks.
E)   the monetary side of the international economy, such as currency exchange.F) B) and E)
G) D) and E)

Question 20

International capital markets experience a kind of risk not faced in domestic capital markets, namely

Accepted Answer

A)   "economic meltdown" risk.
B)   Flood and hurricane crisis risk.
C)   the risk of unexpected downgrading of assets by Standard and Poor.
D)   the risk of exchange rate fluctuations.
E)   the risk of political upheaval.F) A) and C)
G) A) and E)

Exam 1: Introduction

Cost-benefit analysis of international trade

Correct AnswerverifiedShow Answer

In 1998 an economic and financial crisis in South Korea caused it to experience

Correct AnswerverifiedShow Answer

The GATT was

Correct AnswerverifiedShow Answer

International Economists cannot discuss the effects of international trade or recommend changes in government policies toward trade with any confidence unless they know

Correct AnswerverifiedShow Answer

Benefits of international trade are

Correct AnswerverifiedE

Historians of economic thought often describe ________ written by ________ and published in ________ as the first real exposition of an economic model.

Correct AnswerverifiedShow Answer

The United States is less dependent on trade than most other countries because

Correct AnswerverifiedShow Answer

Ancient theories of international economics from the 18th and 19th Centuries are

Correct AnswerverifiedC

How are the patterns of international trade, that is the pattern of what different countries export and import, explained?

Correct AnswerverifiedClimate explains why Brazil exports coff...View AnswerShow Answer

A fundamental problem in international economics is how to produce

Correct AnswerverifiedShow Answer

If there are large disparities in wage levels between countries, then

Correct AnswerverifiedShow Answer

Who sells what to whom

Correct AnswerverifiedShow Answer

During the first three years of its existence, the euro

Correct AnswerverifiedShow Answer

An important insight of international trade theory is that when countries exchange goods and services one with the other it

Correct AnswerverifiedShow Answer

The balance of payments has become a central issue for the United States because

Correct AnswerverifiedShow Answer

The study of exchange rate determination is a relatively new part of international economics, since,

Correct AnswerverifiedShow Answer

International economics can be divided into two broad sub-fields

Correct AnswerverifiedShow Answer

International economics ________ use the same fundamental methods of analysis as other branches of economics, because ________.

Correct AnswerverifiedE

International monetary analysis focuses on

Correct AnswerverifiedShow Answer

International capital markets experience a kind of risk not faced in domestic capital markets, namely

Correct AnswerverifiedShow Answer

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E

Historians of economic thought often describe written by and published in as the first real exposition of an economic model.

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C

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Climate explains why Brazil exports coff...
View Answer

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International economics use the same fundamental methods of analysis as other branches of economics, because .

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E

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