Chapter31

Question 1

The reason U.S. workers were better paid than foreign workers during the 1950’s and 1960s is

Answer 1

C. we had more capital(plants and equipment) per worker

Question 2

Which statement is false?
A. Compared to 30 years ago, there is more sentiment in the US for protection against the import of foreign goods.
B. The basis for international trade is specialization.
C. Our balance of trade has been negative since the early 1900’s.
D. None of the statement is true.

Answer 2

C. Our balance of trade has been negative since the early 1900’s.

Question 3

If Germany can make compact cars more efficiently than Russia, it enjoys

Answer 3

B. an absolute advantage

Question 4

Most economists

Answer 4

B. Consider tariffs less of an evil than quotas

Question 5

We have run merchandise trade deficits of over $70 Billion since

Answer 5

E. 1983

Question 6

One thing we can do to reduce trade imbalance in the United Ststes would be to

Answer 6

A. push down the value of the dollar relative to other currencies

Question 7

One way of reducing our trade deficit would be to get Americans to

Answer 7

B. save more and consume less

Question 8

High protective tariffs

Answer 8

B. will become more likely if we do not reduce our trade deficit

Question 9

A hollow corporations

Answer 9

C. imports foreign goods and puts its own name on them

Question 10

Which makes the most sense economically?

Answer 10

C. National specialization

Question 11

Which statement is the most accurate about trade deficit?

Answer 11

A. there are several problems causing our huge trade deficit; there are no easy solutions to these problems.

Question 12

The Chinese economic expansion since the early 1980’s and the Japanese economic expansion for the late 1940’s through the 1980’s were

Answer 12

B. both dependent on the American market

Question 13

Imports would be lowered by

Answer 13

C. both tariffs and imports quotas

Question 14

Which of the following would NOT be an impact of tariffs imposed on foreign cars?

Answer 14

E. Domestic car prices decline

Question 15

A balance-of-trade surplus exists

Answer 15

A. if the dollar value of exports exceeds the dollar value of imports

Question 16

A tariff can best be described as

Answer 16

E. a limit on the quantity of foreign goods that can be sold in a nation’s domestic market.

Question 17

Which one of the following statements about tariffs and quotas is correct?

Answer 17

A. Only the tariff produces revenues for the government

Question 18

During the years 1970-1986, the merchandise balance of trade in the US shifted from a

Answer 18

C. trade surplus to a large trade deficit

Question 19

Suppose that labor is the only productive resource needed. Scotland has a comparative advantage in producing firewood, while Iceland has a comparative advantage in producing wool. If the two nations trade with each other,

Answer 19

C. Scotland should export firewood and Iceland should export wool

Question 20

When a country exports fewer goods and services than it improts, this is called

Answer 20

C. a balance of trade deficit

Question 21

If a nation A can produce a product at a lower opportunity cost per unit than nation B, nation A

Answer 21

C. has a comparative advantage

Question 22

If a nation has a ______ in the production of an item, it can produce _____ of the item with the same quantity of resources than can other nations.

Answer 22

A. absolute advantage; more

Question 23

An import quota does which of the following?

Answer 23

B. Increase the price of the domestic good to the consumre

Question 24

The introduction of a tariff will be expected to

Answer 24

A. reduce imports

Question 25

An import quota is

Answer 25

E. a limit on the quantiy of foreign goods that can be sold in a nation’s domestic market