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Problemset
Title
Introductory
Text
Self-Assessment Quiz
Question 1
The three basic trends in international trade can be listed as:
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an increase in the share of exports, heterogeneity Incorrect
in the growth of exports regionally, and an ever
changing pattern of export specialization by
developed countries.
an increase in the share of exports, heterogeneity Correct
in the growth of exports regionally, and an ever
changing pattern of export specialization by
developing countries.
an increase in the share of imports, heterogeneity Incorrect
in the growth of imports regionally, and an ever
changing pattern of export specialization by
developed countries.
an increase in the share of imports, heterogeneity Incorrect
in the growth of imports regionally, and an ever
changing pattern of export specialization by
developing countries.
Question 2
Trade openness is usually measured as
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Question 3
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the share of imports to GDP.
Incorrect
the share of exports plus imports to GDP.
Incorrect
the share of exports to GDP.
Correct
the share of foreign investment to GDP.
Incorrect
Since the 1990s, trade openness
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Question 4
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has increased only for developing countries.
Incorrect
has decreased only for developing countries.
Incorrect
has increased more for developed countries.
Incorrect
has increased more for developing countries.
Correct
The trade share of a region represents
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the share of that region’s imports as a percentage Incorrect
of total world imports.
the value of that region’s imports over the total
world exports.
Incorrect
the share of that region’s exports as a percentage Correct
of total world exports.
the share of that region’s sum of exports and
imports as a percentage of the sum of the world
exports and imports.
Question 5
Incorrect
The growth of exports in developing countries has been
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heterogeneous with faster growth in East Asia.
Correct
homogenous across regions.
Incorrect
heterogeneous with faster growth in Latin
America.
Incorrect
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heterogeneous with faster growth in Europe.
Incorrect
Question 6
Developing countries that have traditionally _______________ primary
commodities have expanded their exports to _______________ led by
__________________.
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imported; manufactured products; East and
South Asia
Incorrect
imported; manufactured products; Middle East
and North Africa
Incorrect
exported; service products; Middle East and
North Africa
Incorrect
exported; manufactured products; East and
South Asia
Correct
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Question 7
The theory of comparative advantage was developed by
_______________ and is one of the ______________. It provides a
justification for __________________.
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Adam Smith; oldest theories in economics; free Incorrect
trade
Question 8
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Multiple Choice
Adam Smith; recently proven theories in
economics; protectionism
Incorrect
David Ricardo; oldest theories in economics;
free trade
Correct
David Ricardo; recently proven theories in
economics; protectionism
Incorrect
The following statement: “International trade constitutes a threat to
U.S. employment” would more likely come from
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American factory workers.
Correct
economists.
Incorrect
Mexican and Chinese workers.
Incorrect
All of the above.
Incorrect
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The economist’s view that defends the fact that free trade leads to
specialization and greater efficiency, increasing the welfare of all
countries who are engaged in trading, is based on the theory of
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Question 9
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Question 10
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absolute advantage.
Incorrect
comparative advantage.
Correct
social choice.
Incorrect
labor specialization.
Incorrect
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Exchange is beneficial to ___________ of the parties in the exchange.
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Question 11
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one
Incorrect
usually none
Incorrect
all
Correct
the most productive
Incorrect
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Comparative advantage refers to the idea that countries should
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produce the same goods and exchange a little of Incorrect
each while keeping some for themselves.
Question 12
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Multiple Choice
produce the goods for which the cost of
production is the lowest relative to other
countries’ costs.
Correct
produce the goods they can produce the fastest.
Incorrect
produce the goods they make with the highest
quality.
Incorrect
In international trade, domestic sectors that must compete with imports
become
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winners in terms of having advantage over the
domestic market.
Incorrect
losers in terms of losing competitiveness in the
pricing of the good.
Correct
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winners in terms of the preference nationals of a Incorrect
country give to their own products.
losers in terms of a lower quality of the good
produced domestically.
Question 13
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Multiple Choice
Incorrect
__________________ and ______________ tend to suffer less from
the collective action problem.
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Importers; consumers
Incorrect
Importers; exporters
Correct
Consumers; exporters
Incorrect
None of the above.
Incorrect
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Question 14
A tariff increases the price of the good while creating
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Question 15
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an efficiency gain due to larger profits to the
industry that competes with imports.
Incorrect
an efficiency loss due to the entry of inefficient
producers.
Incorrect
an efficiency loss due to a decrease in the total
consumer surplus.
Incorrect
Both b. and c. are correct.
Correct
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Multilateral trade agreements
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Question 16
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enlarge the set of possible exchanges and
decreases trade diversion.
Correct
enlarge the set of possible exchanges and
increases trade diversion.
Incorrect
decrease the set of possible exchanges and
decreases trade diversion.
Incorrect
decrease the set of possible exchanges and
increases trade diversion.
Incorrect
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As part of the World Trade Organization rules, reciprocity refers to the
fact that
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if country A imports from country B, the
exporting country B must also import from
country A.
Incorrect
if country A exports to country B, the importing Incorrect
country B must also export to country A.
if country A reduces its trade barriers, country B Correct
needs to also reduce its trade barriers.
if country A taxes imports from country B,
Incorrect
country B must also tax imports from country A.
Question 17
Joseph Stiglitz argues that rich countries have
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Question 18
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Question 19
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led campaigns to push the economies of
developing countries through trade.
Incorrect
dominated the World Trade Organization
agenda ignoring the interests of developing
countries.
Correct
failed to take a proactive lead at the World
Trade Organization.
Incorrect
a need to promote a larger proportion of the
world trade.
Incorrect
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If the Mexican peso is high relative to the Costa Rican colon, Costa
Rican exports to Mexico
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will increase.
Correct
will decrease.
Incorrect
will be unchanged.
Incorrect
None of the above applies.
Incorrect
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Countries who hold trade convertibility but lack financial convertibility
are:
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Question 20
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China, Brazil, and India.
Incorrect
China, Malaysia, and Brazil.
Incorrect
China, Malaysia, and India.
Correct
China, Russia, and Brazil.
Incorrect
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A floating exchange-rate regime occurs when the exchange rate for a
currency
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varies only when the government decides.
Incorrect
varies on a monthly basis in line with major
Incorrect
changes in supply and demand for that currency.
varies on a daily basis in line with the supply
and demand for that currency.
Correct
varies around a very small range of prices.
Incorrect
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