Chapter 5 (quiz)
In 2013, which country led the world in merchandise imports? a. Germany b. China c. United States d. Africa
c
A trade _____ is an economic condition in which a nation imports more than it exports. a. deficit b. embargo c. VER d. surplus
a
A trade deficit occurs when a country exports more merchandise than it imports. a. True b. False
b
In the past decade, world trade growth has always matched GDP growth every year. a. True b. False
b
Factor endowment is _____. a. the cost of pursuing one activity at the expense of another given alternative activity b. the degree to which the government allows free trade to exist in its international trade c. the amount of change that patterns of trade undergo over time d. the extent to which different countries possess various factors of production
d
When a country financially subsidizes some of its own key manufacturers, this is an example of: a. an import quota. b. an import tariff. c. an import tax. d. a nontariff barrier.
d
The United States has the largest trade deficit when its deficit in merchandise trade is combined with its surplus in service trade. a. True b. False
a
The theory of absolute advantage is categorized as a classical theory of international trade. a. True b. False
a
The theory of national competitive advantage of industries is also called the diamond theory. a. True b. False
a
Between 1993 and 2013, world trade growth outpaced GDP growth each year. a. True b. False
a
Classical theories are based on the assumption of perfect resource mobility. a. True b. False
a
In 2013, which country led the world in merchandise exports? a. China b. United States c. Africa d. Germany
a
According to the World Trade Organization, between 1993 and 2013 world trade: a. grew by an average of more than 5%. b. grew by nearly 3%. c. shrank by an average of more than 5%. d. shrank by nearly 3%.
a
A trade deficit occurs when a country imports more merchandise than it exports. a. True b. False
a
Which of the following is a classical theory of international trade? a. Comparative advantage theory b. Product life cycle theory c. National competitive advantage of industries theory d. Strategic trade theory
a
Which of the following trade theories divides the nations of the world into three categories? a. Product life cycle b. Strategic trade c. National competitive advantage of industries d. Factor endowment
a
In the context of tariff barriers, net losses that occur in an economy as a result of tariffs are known as deadweight costs. a. True b. False
a
When a firm sells its products to a firm in a foreign country, this is an example of exporting. a. True b. False
a
Net losses that occur in an economy as a result of tariffs are called: a. an import quota. b. a deadweight cost. c. an export tariff. d. a trade deficit.
b
Trade deficit occurs when a nation exports more than it imports. a. True b. False
b
When a country relies on tariffs to discourage imports, this is an example of: a. an import quota. b. a tariff barrier. c. an import tariff. d. an import tax.
b
When a country restricts the amount of goods that can be brought into the country, this is called an export quota. a. True b. False
b
When a country restricts the amount of goods that can be brought into the country, this is called an import tariff. a. True b. False
b
When a firm sells its products to a firm in a foreign country, this is an example of: a. importing. b. exporting. c. resource mobility. d. domestic trading.
b
Which of the following countries has the largest trade deficit when its deficit in merchandise trade is combined with its surplus in service trade? a. Russia b. United States c. India d. China
b
When a country imposes a tax on a good that is imported from another country, this is called: a. an import quota. b. an export tariff. c. a trade deficit. d. an import tariff.
d
Which of the following can be considered as an economic argument against free trade? a. Foreign policy b. Consumer protection c. National security d. Infant industry
d
Which of the following is true of the absolute advantage theory of international trade? a. It divides the countries of the world into three categories based on innovation. b. It advocates extensive government intervention in international trade. c. It emphasizes relative advantage in one economic activity that one nation enjoys in comparison with other nations. d. It was the first theory that advocated free trade.
d