Intro to International Econ ch. 1

True or False. As measured by the index of openness, the United States is relatively closed, and yet, it was the world's largest exporter in 2000

True

True or False. Between 1980 and 2000, virtually all countries have become more open

True

True or False. Countries have trade surpluses when they export more than they import

True

True or False. Growth in per capital GNP in developing countries has tended to be much more variable in recent years than per capita GNP growth rates in industrialized countries

True

True or False. Travel services include purchases of items by residents of one country when they travel to another country

True

The United States tends to export

a wide set of products, primarily manufactured goods

The most commonly traded product (by value) in recent years has been

automobiles

The types of goods Japan exports and imports appear to be well explained by

Japanese endowments of factors of production (e.g. land, labor, capital, natural resources)

Which of the following is true? A) Much of the trade of the European Union (EU) countries is with EU countries. B) Industrialized countries tend to trade relatively little and largely with developing countries. C) Developing countries in Africa and South America tend to trade the most and largely with themselves. D) All of the above are true.

A

The difference between a country's Gross National Product (GNP) and its Gross Domestic product (GDP) is that

GDP refers to production within the nation while GNP refers to production by domestic factors no matter where they are located

International trade

is a relatively small (about 30 percent of world output) but growing part of world economic activity

The ratio of a country's exports to its total output (GNP or GDP)

is known as the index of openness, provides a rough measure of the importance of international trade to that economy, and if calculated for the United States would be quite low.

Japanese exports are heavily concentrated in

manufactured products including motor vehicles

Per capita GNP is defined as a country's GNP divided by its

population

Which of the following statements is false? A) Richer countries tend to be found in North America, Western Europe, and Japan. B) Countries with large populations tend to be rich. C) Growth of per capita GNP tends to be quite stable about 1.5-3 percent per year in industrialized countries. D) Over the past several decades, growth of per capita GNP tends to be higher on average in industrialized countries than in low or middle-income countries.

B

Which of the following statements is false? A) Between 1980 and 2000, the index of openness has risen for most countries. B) Since 1950, international trade has been growing faster than the growth of world output. C) A country cannot be a leading world exporter without a high index of openness. D) Two of the above are true.

C

The leading trading partner of the United States is

Canada

Which of the following statements is true? A) Countries tend to trade extensively with their neighbors. B) The United States is an important trading partner for many countries. C) The largest amount of international trade occurs between industrialized countries. D) All of the above are true.

D

True or False. A country's GNP is always larger than its GDP

False

True or False. A country's index of openness can never exceed 100 in value

False

True or False. If a country is industrialized then prolonged periods of negative growth in GNP per capita should not be a cause for concern

False

True or False. Large countries tend to be more open than small countries

False

True or False. Most of world trade is in the form of manufactured consumer goods such as TVs, stereos, VCRs, and running shoes

False

Countries of the world differ in terms of their

geographic size, population size, and standards of living.

Barriers to trade

include government policies such as tariffs and quotas and have risen since World War II as many countries have imposed higher tariffs