chapter 20

The number of countries belonging to the World Trade Organization (WTO), as of 2015, is about Group of answer choices80.202.125.161.

161

Which of the following statements about the European Union (EU) is true? Group of answer choicesTrade within the EU is liberalized, but EU nations set most of their own policies with regard to trade with non-EU nations. The EU has abolished most trade barriers among participating countries and has common tariffs applied to non-EU goods. The EU has eliminated most barriers to the trade of goods and services among participating nations but largely restricts the movement of labor and capital. All members of the EU use a common currency (the euro).

The EU has abolished most trade barriers among participating countries and has common tariffs applied to non-EU goods.

Philips Curve

a curve that shows the short-run trade-off between inflation and unemployment

Stagflation

a period of slow economic growth and high unemployment (stagnation) while prices rise (inflation)

Which is an example of a nontariff barrier (NTB)?

box-by-box inspection requirements for imported fruit

The United States' most important trading partner quantitatively is

canada

Which of the following is an example of a capital-intensive commodity? Group of answer choiceschemicalssunflower seedsclothingwool

chemicals

Which of the following is an example of a labor-intensive commodity? Group of answer choicesgasolinebeeraspirin tabletsdigital cameras

digital cameras

Country A limits other nation's exports to Country A to 1,000 tons of coal annually. This is an example of a(n) Group of answer choicesimport quota. export subsidy. protective tariff. voluntary export restriction.

import quota.

A protective tariff will Group of answer choicesincrease the sales of foreign exporters. increase the welfare of domestic consumers. create an efficiency gain in the domestic economy. increase the price and sales of domestic producers.

increase the price and sales of domestic producers.

Economists who criticize trade adjustment assistance argue that Group of answer choicesbenefits are too low to provide unemployed workers with a livable wage. money spent on the program overstimulates aggregate demand and threatens to cause inflation. it distorts patterns of foreign trade, reducing the gains from trade. it only benefits a small fraction of all unemployed workers.

it only benefits a small fraction of all unemployed workers.

In a two-nation model, the equilibrium world price will occur where Group of answer choicesexports are exactly twice the level of imports. both nations' import demand curves are vertical. both nations' export supply curves are horizontal. one nation's export supply curve intersects the other nation's import demand curve.

one nation's export supply curve intersects the other nation's import demand curve.

Trade adjustment assistance Group of answer choicesguarantees jobs for all workers displaced by imports or plant relocations abroad. provides assistance to about 20 percent of unemployed U.S. workers each year. provides cash assistance for workers displaced by imports or plant relocations abroad. provides financial assistance to all unemployed workers in the United States.

provides cash assistance for workers displaced by imports or plant relocations abroad.

The terms of trade reflect the Group of answer choicesfact that the gains from trade will be equally divided. cost conditions embodied in a single country's production possibilities curve. ratio at which nations will exchange two goods. rate at which gold exchanges internationally for any domestic currency.

ratio at which nations will exchange two goods.

An excise tax on an imported good that is not produced domestically is called a(n) Group of answer choicesimport quota. protective tariff. voluntary export restriction. revenue tariff.

revenue tariff.

Laffer Curve

shows the relationship between the size of the tax and tax revenue

Other things equal, a tariff is Group of answer choicesinferior to an import quota for Americans because a tariff increases the profits of domestic producers. superior to an import quota for Americans because a tariff generates revenue for the U.S. Treasury. superior to an import quota for Americans because a tariff increases the profits of foreign producers. inferior to an import quota for Americans because a tariff generates revenue for the U.S. Treasury.

superior to an import quota for Americans because a tariff generates revenue for the U.S. Treasury.

Which of the following arguments for trade protection is based on the premise that a nation should have a wide enough range of domestic industries to be self-sufficient if necessary?

the diversification-for-stability argument

Which of the following arguments for trade protection contends that new domestic industries need support to establish themselves and survive?

the infant industry argument

Which of the following arguments contends that certain industries need to be protected in the interest of national security?

the military self-sufficiency argument

short run

the period of time during which at least one of a firm's inputs is fixed

long run

the time period in which all inputs can be varied

Which of the following is an example of a land-intensive commodity? Group of answer choiceswoolchemicalsautoswatches

wool