SEUECN500all Quizes
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School
Colorado State University, Fort Collins**We aren't endorsed by this school
Course
ECON 306
Subject
Economics
Date
Dec 16, 2024
Pages
12
Uploaded by Majedalwahhabi
Quiz SEU_ECN500 –Global Economics Module 1: Globalization and the Foundations of Trade in Economic Perspective Module 2: Comparative Advantage: Sources 10 questions (5 per module) 1. If the value of the dollar ________, other countries’ exports become more expensive for American consumers, thus reducing the amount of goods the United States imports from the rest of the world. a. increases b. decreases c. stays the same d. None of the answers are correct 2. What is the name of the new kind of trade that was introduced during the second wave of globalization? a. Modern trade b. Producer economies c. Innovative trade d. Agglomeration economies 3. What is the term for the ratio of the sum of nation’s exports and imports as a percentage of its gross domestic product? a. International trade b. International relations c. Openness d. Foreign investment 4. The Federal Reserve (Fed) attempts to fulfill its mandate to promote ________, price stability, and economic growth for the U.S. economy. a. current account surplus b. full employment c. high interest rate d. low fiscal deficit 5. What is the first, and perhaps most profound driver of globalization? a. Low trade barriers b. International demand X
c. Technological change d. International supply 6. According to David Hume’s _______, a favorable trade balance is possible only in the short run for over time it would automatically be eliminated. a. Price-Specie-Flow Doctrine b. Demand-Supply Doctrine c. Consumption-Investment Doctrine d. Import-Export Doctrine 7. What was Adam Smith’s trading principle? a. The principle of demand b. The principle of absolute advantage c. The principle of supply d. The principle of investment 8. What does the slope of the production possibilities frontier refer to? a. The marginal consumption b. The marginal cost c. The marginal rate of transformation d. The marginal investment 9. What is the shape of the production possibilities frontier under constant-cost conditions? a. Straight line b. Triangle c. Bowed outward d. Bowed inward 10. Adam Smith was a leading advocate of ________. a. protectionism b. trade barriers c. trade quotas d. free trade
Quiz SEU_ECN500 –Global Economics Module 3: Comparative Advantage: Challenges Module 4: Introduction to Barriers to Trade 10 questions (5 per module) 1. What did Leontief find about the capital/labor ratio for the U.S. export industries compared to its import-competing industries? a. It was higher b. It was lower c. It was the same d. None of the above 2. What are the returns to scale when expansion of the scale of production capacity of a firm or industry causes total production costs to increase less proportionately than output? a. Decreasing returns to scale b. Constant returns to scale c. Increasing returns to scale d. None of the above 3. What is a key aspect of the increasing returns trade theory that suggests that countries will specialize in products that have a large domestic demand? a. The external effect b. The demand effect c. The supply effect d. The home market effect 4. Which trade theory considers the exchange between nations of products of different industries? a. Inter-industry trade b. Intra-industry trade c. Contemporary trade d. None of the answers are correct 5. A product will be traded only if ________ between nations is less than the pre- trade difference between their relative commodity prices. a. the cost of producing it b. the cost of inventing it
c. the cost of transporting it d. None of the above 6. What is the term for a tax levied on a product when it crosses national boundaries? a. Quota b. Tariff c. Subsidy d. Domestic content fee 7. ________ is designed to reduce the number of imports entering a country, thus insulating import-competing producers from foreign competition. a. A revenue tariff b. A supply tariff c. A protective tariff d. A demand tariff 8. One way of escaping a tariff is to engage in ________, the legal utilization of the tariff system to one’s own advantage in order to reduce the amount of tariff that is payable by means that are within the law. a. tariff avoidance b. tariff evasion c. tariff escalation d. None of the above 9. What is the term for an area within the United States where business can operate without the responsibility of paying customs duties on imported products or materials for as long as they remain within this area and do not enter the U.S. marketplace? a. A foreign-trade zone b. A common market c. A trade union d. A cartel 10. Which effect illustrates the loss to the domestic economy resulting from wasted resources? a. The consumption effect b. The protective effect c. The redistributive effect d. The revenue effect
Quiz SEU_ECN500 –Global Economics Module 5: Trade Barriers: Additional Issues Module 6: Trade Regulations and Industrial Policies 10 questions (5 per module) 1. To avoid the problems of a global quota system, import quotas are usually associated to specific countries; this type of quota is known as ________. a. a protective quota b. a revenue quota c. a two tier quota d. a selective quota 2. Concerning the administration of tariff-rate quotas, which is the most common technique of enforcement for the quotas? a. License on supply allocation b. License on demand allocation c. Revenue tariff d. Protective tariff 3. What occurs when foreign buyers are charged lower prices than domestic buyers for an identical product? a. Dumping b. Subsidizing c. Protection d. None of the answers are correct 4. Which measure may take the form of direct cash bounties, tax concessions, credit extended at low interest rates, or special insurance arrangements? a. Government licenses b. Government certificates c. Government subsidies d. Government content requirements 5. Which one is more restrictive –a quota or a tariff? a. A tariff
b. A quota c. They are the same d. None of the above 6. The high point of U.S. protectionism occurred with the passage of the ________ in 1930, under which U.S. average tariffs were raised to 53 percent on protected imports. a. Smoot-Sinclair Act b. Smith-Ricardo Act c. Smith-Hawley Act d. Smoot-Hawley Act 7. In 1995, the General Agreement on Tariffs and Trade (GATT) was transformed into which organization? a. The International Monetary Fund b. The World Bank c. The World Trade Organization d. The World Investment Organization 8. Which term includes copyrights, trademarks, and patents? a. Intellectual property b. Supply c. Demand d. Consumption 9. At which trade round was the average tariff on manufactured goods of the nine major industrial countries cut from 7.0 percent to 4.7 percent, which is reflective of a 39 percent decrease? a. The Doha round b. The Uruguay round c. The Tokyo round d. The Kennedy round 10. ________ are intended to offset any unfair competitive advantage that foreign producers might gain over domestic producers because of foreign subsidies. a. Subsidies b. Countervailing duties c. Government licenses d. Consumption taxes
Quiz SEU_ECN500 –Global Economics Module 9: International Factor Movements and Multinational Enterprises Module 10: Balance of Payments and Foreign Exchange 10 questions (5 per module) 1. What kind of integration occurs when a parent company producing a commodity in the source country sets up a subsidiary to produce an identical product in the host country? a. Vertical integration b. Horizontal integration c. Conglomerate integration d. None of the above 2. ________ differ from mergers in that they involve the creation of a new business firm, rather than the union of two existing companies. a. Joint ventures b. Project organizations c. Customs unions d. Common markets 3. Developing nations sometimes fear open immigration policies because they can result in a ________, which is an emigration of highly educated and skilled people from developing nations to industrial nations, which limits the growth potential of the developing nations. a. Demand shock b. Supply shock c. Investment shock d. Brain drain 4. What kind of integration occurs when MNEs diversify into nonrelated markets? a. Horizontal integration b. Vertical integration c. Conglomerate integration d. None of the answers are correct 5. Some of the more controversial issues involving MNEs are __________. a. Employment b. Technology transfer
c. National sovereignty d. All answers are correct 6. What is the term for a record of the economic transactions between the residents of one country and the rest of the world? a. The debit payments b. The credit payments c. The balance-of-payments d. The investment payments 7. Which accounting system does the balance-of-payments utilize? a. A single entry accounting system b. A double entry accounting system c. A zero entry accounting system d. A five entry accounting system 8. Which rate refers to the price that the bank is willing to pay for a unit of foreign currency? a. The bid rate b. The offer rate c. The spread rate d. The demand rate 9. What is the difference between the bid and the offer rate called, when it varies by the size of the transaction and the liquidity of the currencies being traded? a. The supply b. The demand c. The spread d. The spot rate 10. What is the term for an agreement between a holder (buyer) and a writer (seller) that gives the holder the right, but not the obligation, to buy or sell financial instruments at any time through a specified date? a. A swap b. A spot transaction c. A forward transaction d. An option
Quiz SEU_ECN500 –Global Economics Module 11: Exchange Rate Determination Module 12: Exchange Rate Adjustments and the Balance of Payments 10 questions (5 per module) 1. What is the term for the factors that include economic variables such as productivity, inflation rates, real interest rates, consumer preferences, and government trade policy? a. Demand factors b. Supply factors c. Market fundamentals d. Financial fundamentals 2. In which timeframe are foreign exchange transactions dominated by flows of goods, services, and investment capital that respond to forces such as inflation rates, investment profitability, consumer tastes, productivity, and government trade policy? a. The short run b. The long run c. The medium run d. None of the answers are correct 3. Exchange rates adjust to make goods and services cost the same everywhere and thus the law of one price becomes applicable based on what theory? a. Purchasing-power-parity theory b. Demand theory c. Supply theory d. Investment theory 4. The real interest rate is the nominal interest rate minus which other rate? a. The swap rate b. The spot rate c. The inflation rate d. The forward rate 5. What is the other name of Judgmental forecasts? a. Common sense models b. Fundamental models
c. Econometric models d. Financial models 6. The absorption approach deals with which effects of depreciation? a. The price effects b. The monetary effects c. The income effects d. The productivity effects 7. When all of a firm’s inputs are acquired domestically and their costs are denominated in the domestic currency, an appreciation in the domestic currency’s exchange value tends to ________ the firm’s costs by the same proportion, in terms of the foreign currency. a. decrease b. increase c. both A and B d. None of the above 8. By increasing relative U.S. production costs, a dollar appreciation tends to ________ U.S. export prices in terms of a foreign currency, which induces ________ in the quantity of U.S. goods sold abroad. a. raise; a decrease b. raise; an increase c. decrease; a decrease d. decrease; an increase 9. According to the elasticities approach, currency depreciation leads to the greatest improvement in a country’s trade position when demand elasticities are ________. a. low b. zero c. high d. None of the above 10. The time path of currency depreciation can be explained in terms of ________. According to this concept, the response of trade flows to changes in relative prices increases with the passage of time. a. J-curve effect b. W-curve effect c. L-curve effect d. D-curve effect
Quiz SEU_ECN500 –Global Economics Module 13: Exchange Rate Systems and Currency Crises Module 14: Macroeconomic Policy in an Open Economy 10 questions (5 per module) 1. What occurs when there is a purchase or a sale of a currency on the exchange market by the fiscal authority or the monetary authority to influence the value of that currency? a. Fiscal policy b. Currency manipulation c. Monetary policy d. Supply manipulation 2. What is the term for currency crises that end in devaluations or accelerated depreciations? a. Supply shock b. Demand shock c. Investment crashes d. Currency crashes 3. What is the other name of a currency crisis? a. A demand attack b. A supply attack c. A speculative attack d. None of the answers are correct 4. What is the term for government-imposed barriers to foreign savers investing in domestic assets (e.g., government securities, stock, or bank deposits) or to domestic savers investing in foreign assets? a. Capital controls b. Supply restrictions c. Demand restrictions d. Production controls 5. What is the term for a currency basket composed of the four key currencies of IMF members? a. The special supply right b. The special demand right c. The special drawing right
d. The special consumption right 6. What is it called when a nation realizes neither deficits nor surpluses in its current account? a. External balance b. Internal balance c. Overall balance d. Financial balance 7. Which policies modify the direction of demand, shifting it between domestic output and imports? a. Expenditure correcting policies b. Expenditure switching policies c. Expenditure changing policies d. Expenditure balancing policies 8. Which policy is weakened under fixed exchange rates? a. Fiscal policy b. Internal policy c. Monetary policy d. External policy 9. To achieve overall balance, nations implement expenditure changing policies (monetary and fiscal policies), expenditure switching policies (exchange rate adjustments), and what else? a. Indirect controls b. Demand controls c. Supply controls d. Direct controls 10. When a nation experiences inflation with unemployment, achieving overall balance involves three separate targets: current account equilibrium, full employment, and what else? a. Low interest rate b. Price stability c. Trade surplus d. Trade deficit