International Economics
Multiple-Choice Questions for International Economics
by
Dr. Bob Carbaugh Department of Economics Central Washington University
Chapter 1: The International Economy and Globalization
A primary reason why nations conduct international trade is because: a. Some nations prefer to produce one thing while others produce another *b. Resources are not equally distributed to all trading nations c. Trade enhances opportunities to accumulate profits d. Interest rates are not identical in all trading nations A main advantage of specialization results from: *a. Economics of large scale production b. The specializing country behaving as a monopoly c. Smaller production runs resulting in lower unit costs. d. High wages paid to foreign workers International trade in goods and services is sometimes used as a substitute for all of the following except: a. International movements of capital. b. International movements of labor. c. International movements of technology *d. Domestic production of different goods and services If a nation has an open economy it means that the nation: a. Allows private ownership of capital. b. Has flexible exchange rates c. Has fixed exchange rates *d. Conducts trade with other countries International trade forces domestic firms to become more competitive in terms of: a. The introduction of new products b. Product design and quality
c. *d.
Product price All of the above
The movement to free international trade is most likely to generate short-term unemployment in which industries: a. Industries in which there are neither imports nor exports *b. Import-competing industries. c. Industries that sell to domestic and foreign buyers d. Industries that sell to only foreign buyers International trade is based on the idea that: a. Exports should exceed imports b. Imports should exceed exports c. Resources are more mobile internationally than are goods *d. Resources are less mobile internationally than are goods Arguments for free trade are
by
Dr. Bob Carbaugh Department of Economics Central Washington University
Chapter 1: The International Economy and Globalization
A primary reason why nations conduct international trade is because: a. Some nations prefer to produce one thing while others produce another *b. Resources are not equally distributed to all trading nations c. Trade enhances opportunities to accumulate profits d. Interest rates are not identical in all trading nations A main advantage of specialization results from: *a. Economics of large scale production b. The specializing country behaving as a monopoly c. Smaller production runs resulting in lower unit costs. d. High wages paid to foreign workers International trade in goods and services is sometimes used as a substitute for all of the following except: a. International movements of capital. b. International movements of labor. c. International movements of technology *d. Domestic production of different goods and services If a nation has an open economy it means that the nation: a. Allows private ownership of capital. b. Has flexible exchange rates c. Has fixed exchange rates *d. Conducts trade with other countries International trade forces domestic firms to become more competitive in terms of: a. The introduction of new products b. Product design and quality
c. *d.
Product price All of the above
The movement to free international trade is most likely to generate short-term unemployment in which industries: a. Industries in which there are neither imports nor exports *b. Import-competing industries. c. Industries that sell to domestic and foreign buyers d. Industries that sell to only foreign buyers International trade is based on the idea that: a. Exports should exceed imports b. Imports should exceed exports c. Resources are more mobile internationally than are goods *d. Resources are less mobile internationally than are goods Arguments for free trade are