Week 5 Knowledge Check Study Guide

Week 5 Knowledge Check Study Guide
Concepts

Mastery

TRADE DEFICITS

Questions

100%

1

100%

2

TRADE TARIFFS

100%

3

TARIFFS

100%

4

EXCHANGE RATES

100%

5

TRADE RESTRICTION

100%

6

INTERNATIONAL
TRADE;

Score: 6 / 6

Concept: TRADE DEFICITS
Mastery

1.

100%

Questions

1

In the U.S. current account, most of the trade deficit results from an excess of imported

A. merchandise and services
B. merchandise
C. services
D. transfer

Correct:
The Correct Answer is: B.

Concept: INTERNATIONAL TRADE;
Mastery

100%

Questions

2

2.
What is the difference between the balance of trade and the balance of payments?

A. The balance of trade is only part of the balance of trade.
B. The balance of payments is only part of the balance of trade.
C. The two are different parts of the balance of merchandise accounts. D. The two are different parts of the balance of financial and capital accounts.

Correct:
The Correct Answer is: A.

Concept: TRADE TARIFFS
Mastery

100%

Questions

3

3.
If a government has implemented significantly higher trade tariffs, but does not want this action to affect the value of its currency, it will

A. sell foreign currency because the tariffs will tend to make the domestic currency depreciate

B. buy foreign currency because the tariffs will tend to make the domestic currency appreciate

C. sell foreign currency because the tariffs will tend to make the domestic currency appreciate

D. buy.

Correct:
The Correct Answer is: B.

Concept: TARIFFS
Mastery

4.

100%

Questions

4

During 2007, the United States and Japan announced possible limits on Chinese imports through higher tariff rates on Chinese products. To avoid these limits, China would have to A. decrease the value of the yuan and increase its trade surplus
B. decrease the value of the yuan and decrease its trade surplus
C. increase the value of the yuan and increase its trade surplus
D. increase the value of the yuan and decrease its trade surplus

Correct:
The Correct Answer