Chapter 20 Warm-up exercise Macro-ECON

U.S. exports of goods and services (on a national income account basis) are about

13 percent of U.S. GDP.

Which of the following statements is false? A. In recent years, the United States has had large annual trade deficits in goods and services. B. The United States imports some of the same categories of goods as it exports. C. China has the largest share of world exports. D. As a percentage of GDP, U.S. exports are the highest among the industrially advanced nations.

As a percentage of GDP, U.S. exports are the highest among the industrially advanced nations.

Which country has the largest share of total world exports?

China

In terms of absolute dollar volume, the top 3 leaders in world exports are

China, the United States, and Germany.

The fact that international specialization and trade based on comparative advantage can increase world output is demonstrated by the reality that

a nation's trading possibilities line lies to the right of its production possibilities line.

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

box-by-box inspection requirements for imported fruit

As a percentage of GDP, U.S. exports are

considerably lower than in several other industrially advanced nations.

In order for mutually beneficial trade to occur between two otherwise isolated nations,

each nation must be able to produce at least one good relatively cheaper than the other.

In recent years, the United States has

exported more services abroad than it has imported.

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)

import quota.

In the real world, specialization is rarely complete because

nations normally experience increasing opportunity costs in producing more of the product in which they are specializing.

Excise taxes on imported goods that help shield domestic producers of the good are called

protective tariffs.

The terms of trade reflect the

ratio at which nations will exchange two goods.

An excise tax on an imported good that is not produced domestically is called a

revenue tariff.

If two nations have straight-line production possibilities curves,

there will be a basis for mutually advantageous trade provided the slopes differ.