(TCO 8) Countries engaged in international trade specialize in production based on Student Answer: relative levels of GDP.

(TCO 8) Countries engaged in international trade specialize in production based on

Student Answer: relative levels of GDP.

comparative advantage.

relative exchange rates.

relative inflation rates.

Instructor Explanation: Chapter 37

Points Received: 1 of 1

Comments:

Question 2. Question :

(TCO 8) The World Trade Organization

Student Answer: is also known as the International Monetary Fund (IMF).

is also known as NAFTA.

was established to resolve disputes arising under world trade rules.

enhances world trade by providing interest rate subsidies to foreign borrowers who buy exports on credit.

Instructor Explanation: Chapter 37

Points Received: 1 of 1

Comments:

Question 3. Question :

(TCO 9) The current account in a nation’s balance of payments includes

Student Answer: its goods exports and imports, and its services exports and imports.

foreign purchases of domestic assets.

purchases of foreign assets.

All of these

Instructor Explanation: Chapter 38

Points Received: 1 of 1

Comments:

Question 4. Question :

(TCO 9) If the exchange rate between the U.S. dollar and the Japanese yen is $1 = 200 yen, then the dollar price of the yen is

Student Answer: $.005.

$.05.

$.50.

$5.

Instructor Explanation: Chapter 38

Points Received: 1 of 1

Comments:

Question 5. Question :

(TCO 9) In terms of individual nations, the largest U.S. trade deficit is with

Student Answer: Japan.

Mexico.

China.

Canada.

Instructor Explanation: Chapter 38

Points Received: 1 of 1

Comments:

Question 6. Question :

(TCO 9) Other things being equal, an increase in the U.S. rate of inflation is likely to cause an increase in the:

Student Answer: Quantity of U.S. exports

Quantity of U.S. imports

Demand for U.S. dollars

International value of the U.S. dollar

Instructor Explanation: Chapter 38

Points Received: 1 of 1

Comments:

Question 7. Question :

(TCO 8) Other things equal, economists would prefer

Student Answer: free trade to tariffs and tariffs to import quotas.

free trade to import quotas and import quotas to tariffs.

import quotas to tariffs and tariffs to voluntary export restrictions.

import quotas to free trade and free trade to tariffs.

Instructor Explanation: Chapter 37

Points Received: 1 of 1

Comments:

Question 8. Question :

(TCO 8) Refer to the graphs below. Stanville has a comparative advantage in producing

Graph Description

Student Answer: Product A.

Product B.

both Product A and B.

neither Product A nor B.

Instructor Explanation: Chapter 37

Points Received: 1 of 1

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