Econ 5 Quiz
INCORRECT | |
Over the past several years, the volume of world trade has: | | | A) | decreased because of increased government regulation of trade through tariffs and quotas | | | B) | decreased because of the decline in incomes brought on by global recession | | | C) | increased because of increased government regulation of trade through tariffs and quotas | | | D) | increased because of improvements in communications and transportation | | | | | | Feedback: Trade has increased for two important reasons— a worldwide reduction in tariffs and the advent of new technologies in communications and transportation. | | 2 CORRECT | |
A tariff: | | | A) | raises the price of imported goods, increasing the demand for domestic substitutes | | | B) | lowers the cost of producing domestic goods | | | C) | offsets the effect of a quota | | | D) | raises the price of domestic goods, lowering the demand for them | | | | | | Feedback: A tariff acts as a tax on the imported good, raising its price. As a result, consumers shift their demands to domestic substitute goods. | | 3 INCORRECT | |
U.S. exports: | | | A) | average 4-6 percent of GDP, as do imports | | | B) | average 18-20 percent of GDP, while imports average 10-12 percent | | | C) | average 10-12 percent of GDP, while imports average 15-17 percent | | | D) | average 1-2 percent of GDP, while imports average 4-6 percent | | | | | | Feedback: U.S. Exports and imports both average between 10 and 20 percent of GDP, however the U.S. has had a substantial trade deficit over the past many years. Imports are substantially greater than exports as a percentage of U.S. GDP. | | 4 INCORRECT | |
A government agency requires that all agricultural goods entering the country undergo an unduly long inspection process to assure product quality. This is an example of: | | | A) | an export subsidy | | | B) | a tariff | | | C) | a
Over the past several years, the volume of world trade has: | | | A) | decreased because of increased government regulation of trade through tariffs and quotas | | | B) | decreased because of the decline in incomes brought on by global recession | | | C) | increased because of increased government regulation of trade through tariffs and quotas | | | D) | increased because of improvements in communications and transportation | | | | | | Feedback: Trade has increased for two important reasons— a worldwide reduction in tariffs and the advent of new technologies in communications and transportation. | | 2 CORRECT | |
A tariff: | | | A) | raises the price of imported goods, increasing the demand for domestic substitutes | | | B) | lowers the cost of producing domestic goods | | | C) | offsets the effect of a quota | | | D) | raises the price of domestic goods, lowering the demand for them | | | | | | Feedback: A tariff acts as a tax on the imported good, raising its price. As a result, consumers shift their demands to domestic substitute goods. | | 3 INCORRECT | |
U.S. exports: | | | A) | average 4-6 percent of GDP, as do imports | | | B) | average 18-20 percent of GDP, while imports average 10-12 percent | | | C) | average 10-12 percent of GDP, while imports average 15-17 percent | | | D) | average 1-2 percent of GDP, while imports average 4-6 percent | | | | | | Feedback: U.S. Exports and imports both average between 10 and 20 percent of GDP, however the U.S. has had a substantial trade deficit over the past many years. Imports are substantially greater than exports as a percentage of U.S. GDP. | | 4 INCORRECT | |
A government agency requires that all agricultural goods entering the country undergo an unduly long inspection process to assure product quality. This is an example of: | | | A) | an export subsidy | | | B) | a tariff | | | C) | a