ECO 305 Week 2 Quiz – Strayer NEW
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CHAPTER 1
THE INTERNATIONAL ECONOMY AND
GLOBALIZATION
MULTIPLE CHOICE
1. A
primary reason why nations conduct international trade is because:
a. Some nations prefer to produce one
thing while others produce other things
b. Resources are not equally distributed
among all trading nations
c. Trade enhances opportunities to
accumulate profits
d. Interest rates are not identical in all
trading nations
2. A
main advantage of specialization results from:
a. Economies 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
3. 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. Domestic production of the same goods
and services
d. Domestic production of different goods
and services
4. 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
5. International
trade forces domestic firms to become more competitive in terms of:
a. The introduction of new products
b. Product design and quality
c. Product price
d. All of the above
6. 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
7. 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
8. Arguments
for free trade are sometimes disregarded by politicians because:
a. Maximizing domestic efficiency is not
considered important
b. Maximizing consumer welfare may not be
a chief priority
c. There exist sound economic reasons for
keeping one's economy isolated from other economies
d. Economists tend to favor highly
protected domestic markets
9. How
much physical output a worker producers in an hour's work depends on:
a. The worker's motivation and skill
b. The technology, plant, and equipment in
use
c. How easy the product is to manufacture
d. All of the above
10. The
largest amount of trade with the United States in recent years has been conducted
by:
a. Canada
b. Germany
c. Chile
d. United Kingdom
11. Increased
foreign competition tends to:
a. Intensify inflationary pressures at
home
b. Induce falling output per worker-hour
for domestic workers
c. Place constraints on the wages of domestic
workers
d. Increase profits of domestic
import-competing industries
12. ____
is the ability of a firm/industry, under free and fair market conditions, to
design, produce, and market goods and services that are better and/or cheaper
than those of other firms/industries.
a. Competitiveness
b. Protectionism
c. Comparative advantage
d. Absolute advantage
13. A
firm's ____, relative to that of other firms, is generally regarded as the most
important determinant of competitiveness.
a. Income level
b. Tastes and preferences
c. Governmental regulation
d. Productivity
14. Free
traders maintain that an open economy is advantageous in that it provides all
of the following except:
a. Increased competition for world
producers
b. A wider selection of products for
consumers
c. The utilization of the most efficient
production methods
d. Relatively high wage levels for all
domestic workers
15. Recent
pressures for protectionism in the United States have been motivated by all of
the following except:
a. U.S. firms shipping component
production overseas
b. High profit levels for American
corporations
c. Sluggish rates of productivity growth
in the United States
d. High unemployment rates among American
workers
16. International
trade tends to cause welfare losses to at least some groups in a country:
a. The less mobile the country's resources
b. The more mobile the country's resources
c. The lower the country's initial living
standard
d. The higher the country's initial living
standard
17. For
a nation to maximize its productivity in a global economy:
a. Only imports are necessary
b. Only exports are necessary
c. Both imports and exports are necessary
d. Neither imports nor exports are
necessary
18. A
feasible effect of international trade is that:
a. A monopoly in the home market becomes
an oligopoly in the world market
b. An oligopoly in the home market becomes
a monopoly in the world market
c. A purely competitive firm becomes an
oligopolist
d. A purely competitive firm becomes a
monopolist
19. International
trade in goods and services tends to:
a. Increase all domestic costs and prices
b. Keep all domestic costs and prices at
the same level
c. Lessen the amount of competition facing
home manufacturers
d. Increase the amount of competition
facing home manufacturers
20. The
real income of domestic producers and consumers can be increased by:
a. Technological progress, but not
international trade
b. International trade, but not
technological progress
c. Technological progress and
international trade
d. Neither technological progress nor
international trade
21. In
the United States, automobiles are
a. Imported, but not exported
b. Exported, but not imported
c. Imported and exported
d. Neither exported nor imported
22. Technological
improvements are similar to international trade since they both:
a. Provide benefits for all producers and
consumers
b. Increase the nation's aggregate income
c. Reduce unemployment for all domestic
workers
d. Ensure that industries can operate at
less than full capacity
23. A
sudden shift from import tariffs to free trade may induce short-term
unemployment in:
a. Import-competing industries
b. Industries that are only exporters
c. Industries that sell domestically as
well as export
d. Industries that neither import nor
export
24. Recent
empirical studies indicate that productivity performance in industries is:
a. Directly related to globalization of
industries
b. Inversely related to globalization of
industries
c. Not related to globalization of
industries
d. Any of the above
25. Empirical
research indicates that ____ best enhances productivity gains for firms and
industries.
a. Local competition
b. Regional competition
c. Global competition
d. No competition
26. Increased
globalization is fostered by:
a. Increased tariffs and quotas
b. Restrictions on the migration of labor
c. Reduced transportation costs
d. Restrictions on investment flows
27. A
reduced share of the world export market for the United States would be
attributed to:
a. Decreased productivity in U.S.
manufacturing
b. High incomes of American households
c. Relatively low interest rates in the
United States
d. High levels of investment by American
corporations
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