Question 1

Theories of international economics from the 18th and 19th centuries are

Accepted Answer

A)  not relevant to current policy analysis.
B)  only of moderate relevance in today's modern international economy.
C)  highly relevant in today's modern international economy.
D)  the only theories that are actually relevant to modern international economy.
E)  not well understood by modern mathematically oriented theorists.F) A) and B)
G) A) and C)

Question 2

"Trade is generally harmful if there are large disparities between countries in wages."

Accepted Answer

A)  This is generally true.
B)  This is generally false.
C)  Trade theory has nothing to say about this issue.
D)  This is true if the trade partner ignores child labor laws.
E)  This is true if the trade partner uses prison labor.F) C) and D)
G) B) and C)

Question 3

International economics can be divided into two broad sub-fields

Accepted Answer

A)  macro and micro.
B)  developed and less developed.
C)  monetary and barter.
D)  international trade and international money.
E)  static and dynamic.F) A) and E)
G) B) and E)

Question 4

The benefits of international trade are derived from trade in

Accepted Answer

A)  tangible goods only.
B)  intangible goods only.
C)  goods but not services.
D)  services but not goods.
E)  anything of value.F) C) and E)
G) None of the above E

Question 5

An important insight of international trade theory is that when two countries engage in voluntary trade

Accepted Answer

A)  one country always benefits at the expense of the other.
B)  it is almost always beneficial to both countries.
C)  it only benefits the low wage country.
D)  it only benefits the high wage country.
E)  it is almost never beneficial to both countries.F) A) and E)
G) A) and B)

Question 6

The GATT is

Accepted Answer

A)  an international agreement.
B)  an international U.N.agency.
C)  an international IMF agency.
D)  a U.S.government agency.
E)  a collection of tariffs.F) D) and E)
G) B) and E)

Question 7

It is argued that global trade tends to be more important to countries with smaller economies than the U.S.Is this empirically verified?

Accepted Answer

Yes.Figure 1-2 shows exports and imports...

Question 8

In 1998 an economic and financial crisis in South Korea caused it to experience

Accepted Answer

A)  a surplus in their balance of payments.
B)  a deficit in their balance of payments.
C)  a balanced balance of payments.
D)  an unbalanced balance of payments.
E)  a lull in international trade.F) A) and E)
G) C) and D)

Question 9

In September 2010,the finance minister of ________ declared that the world was "in the midst of an international currency war" because of rapid appreciation in the value of the country's currency,the ________.

Accepted Answer

A)  England;pound sterling
B)  Germany;euro
C)  Japan;yen
D)  China;renminbi
E)  Brazil;RealF) A) and C)
G) A) and E)

Question 10

The distinction between international trade and international money is NOT entirely clear because

Accepted Answer

A)  real developments in the trade accounts do not have monetary implications.
B)  the balance of payments includes only real measures.
C)  developments caused by purely monetary changes have no real effects.
D)  trade models focus on real,or barter relationships.
E)  most international trade involves monetary transactions.F) B) and C)
G) A) and C)

Question 11

International monetary analysis focuses on

Accepted Answer

A)  the real side of the international economy.
B)  the international trade side of the international economy.
C)  the international investment side of the international economy.
D)  the issues of international cooperation between Central Banks.
E)  the monetary side of the international economy,such as currency exchange.F) A) and B)
G) B) and E)

Question 12

International economists cannot discuss the effects of international trade or recommend changes in government policies toward trade with any confidence unless they know

Accepted Answer

A)  their theory is the best available.
B)  their theory is internally consistent.
C)  their theory passes the "reasonable person" legal criteria.
D)  their theory is good enough to explain the international trade that is actually observed.
E)  their theory accounts for China's unique position in international trade.F) A) and D)
G) B) and E)

Question 13

The study of exchange rate determination is a relatively new part of international economics,since

Accepted Answer

A)  for much of the past century,exchange rates were fixed by government action.
B)  the calculations required for this were not possible before modern computers became available.
C)  economic theory developed by David Hume demonstrated that real exchange rates remain fixed over time.
D)  dynamic overshooting asset pricing models are a recent theoretical development.
E)  the exchange rate never fluctuates.F) A) and E)
G) B) and C) A

Question 14

The international capital market is

Accepted Answer

A)  the place where you can rent earth moving equipment anywhere in the world.
B)  a set of arrangements by which individuals and firms exchange money now for promises to pay in the future.
C)  the arrangement where banks build up their capital by borrowing from the Central Bank.
D)  the place where emerging economies accept capital invested by banks.
E)  exclusively concerned with the debt crisis that ended in the 1990s.F) A) and B)
G) A) and C)

Question 15

Who sells what to whom

Accepted Answer

A)  has been a major preoccupation of international economics.
B)  is not a valid concern of international economics.
C)  is not considered important for government foreign trade policy since such decisions are made in the private competitive market.
D)  is determined by political rather than economic factors.
E)  is less important than international economic theory.F) A) and E)
G) C) and D)

Question 16

Historians of economic thought often describe ________ written by ________ and published in ________ as the first real exposition of an economic model.

Accepted Answer

A)  "Of the Balance of Trade," David Hume,1776
B)  "Wealth of Nations," David Hume,1758
C)  "Wealth of Nations," Adam Smith,1758
D)  "Wealth of Nations," Adam Smith,1776
E)  "Of the Balance of Trade," David Hume,1758F) A) and E)
G) A) and D)

Question 17

An improvement in a country's balance of payments means a decrease in its balance of payments deficit,or an increase in its surplus.In fact we know that a surplus in a balance of payments

Accepted Answer

A)  is always beneficial.
B)  is usually beneficial.
C)  is never harmful.
D)  is sometimes harmful.
E)  is always harmful.F) A) and C)
G) B) and D)

Question 18

The balance of payments has become a central issue for the United States because

Accepted Answer

A)  when the balance of payments is not balanced,society is unbalanced.
B)  the U.S.economy cannot grow when the balance of payments is in deficit.
C)  the U.S.has run huge trade deficits in every year since 1982.
D)  the U.S.never experienced a surplus in its balance of payments.
E)  the U.S.once ran a large trade surplus of about $40 billion.F) A) and B)
G) A) and C)

Question 19

From 1950 to 2015

Accepted Answer

A)  the U.S.economy roughly tripled in size.
B)  U) S.imports roughly tripled in size.
C)  the share of U.S.trade in the global economy roughly tripled in size.
D)  U) S.imports roughly tripled as compared to U.S.exports.
E)  U) S.exports roughly tripled in size.F) A) and D)
G) A) and C) C

Question 20

Which of the following is NOT a major concern of international economic theory?

Accepted Answer

A)  protectionism
B)  the balance of payments
C)  exchange rate determination
D)  bilateral trade relations with China
E)  the international capital marketF) A) and B)
G) A) and E)

Exam 1: Introduction

Theories of international economics from the 18th and 19th centuries are

Correct AnswerverifiedShow Answer

"Trade is generally harmful if there are large disparities between countries in wages."

Correct AnswerverifiedShow Answer

International economics can be divided into two broad sub-fields

Correct AnswerverifiedShow Answer

The benefits of international trade are derived from trade in

Correct AnswerverifiedE

An important insight of international trade theory is that when two countries engage in voluntary trade

Correct AnswerverifiedShow Answer

The GATT is

Correct AnswerverifiedShow Answer

It is argued that global trade tends to be more important to countries with smaller economies than the U.S.Is this empirically verified?

Correct AnswerverifiedYes.Figure 1-2 shows exports and imports...View AnswerShow Answer

In 1998 an economic and financial crisis in South Korea caused it to experience

Correct AnswerverifiedShow Answer

In September 2010,the finance minister of ________ declared that the world was "in the midst of an international currency war" because of rapid appreciation in the value of the country's currency,the ________.

Correct AnswerverifiedShow Answer

The distinction between international trade and international money is NOT entirely clear because

Correct AnswerverifiedShow Answer

International monetary analysis focuses on

Correct AnswerverifiedShow Answer

International economists cannot discuss the effects of international trade or recommend changes in government policies toward trade with any confidence unless they know

Correct AnswerverifiedShow Answer

The study of exchange rate determination is a relatively new part of international economics,since

Correct AnswerverifiedA

The international capital market is

Correct AnswerverifiedShow Answer

Who sells what to whom

Correct AnswerverifiedShow Answer

Historians of economic thought often describe ________ written by ________ and published in ________ as the first real exposition of an economic model.

Correct AnswerverifiedShow Answer

An improvement in a country's balance of payments means a decrease in its balance of payments deficit,or an increase in its surplus.In fact we know that a surplus in a balance of payments

Correct AnswerverifiedShow Answer

The balance of payments has become a central issue for the United States because

Correct AnswerverifiedShow Answer

From 1950 to 2015

Correct AnswerverifiedC

Which of the following is NOT a major concern of international economic theory?

Correct AnswerverifiedShow Answer

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E

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Yes.Figure 1-2 shows exports and imports...
View Answer

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In September 2010,the finance minister of declared that the world was "in the midst of an international currency war" because of rapid appreciation in the value of the country's currency,the .

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A

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Historians of economic thought often describe written by and published in as the first real exposition of an economic model.

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C

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