Multiple Choice Quiz


1	International Trade has been growing _____ the overall economy, which means trade as a percentage of GDP has been ______.
		A)	at the same rate as; constant
		B)	faster than; rising
		C)	slower than; falling
		D)	faster than; constant


2	Exports from the United States in 2000 were most prevalent (measured in dollar terms) in what sector of the economy
		A)	Food and Agricultural Products
		B)	Airplanes
		C)	Services
		D)	Computers


3	Imports in 2000
		A)	exceeded exports by nearly $400 billion.
		B)	roughly equaled exports.
		C)	were exceeded by exports by nearly $400 billion.
		D)	exceeded exports by nearly $400 trillion.


4	In 2000 overall U.S. trade with Mexico was
		A)	more than any other nation except Canada.
		B)	less than that with Middle Eastern Countries.
		C)	less that than with China.
		D)	actually less than trade with Oman.


5	Suppose there are only two traded goods, shoes and computers, and a unit of Mexican labor can produce 5 shoes and 1 computer and a unit of U.S. labor can produce 10 shoes and 10 computers then
		A)	the United States has a comparative and absolute advantage in both goods.
		B)	the United States has an absolute advantage in both goods and a comparative advantage in computers while Mexico has a comparative advantage in shoes.
		C)	the United States has an absolute advantage and comparative advantage in computers while Mexico has an absolute and comparative advantage in shoes.
		D)	The United States has an absolute advantage in both goods but neither has a comparative advantage in either good.


6	Using two countries production possibilities frontiers, you can show that trade makes
		A)	both countries better off in their ability to consume.
		B)	one country better off and the other worse off in their ability to consume.
		C)	both country's worse off in their ability to consume.
		D)	war more likely.


7	Of the following reasons to limit trade the one that is least palatable to economists is
		A)	the national security argument
		B)	the environmental argument
		C)	the child-labor argument
		D)	the protection-of-jobs argument


8	Which of the following means of limiting trade employs a tax on imports
		A)	quotas
		B)	custom's provisions
		C)	tariffs
		D)	export subsidies


9	Trade protection measures typically cost society _______ the wages of those whose jobs are saved.
		A)	much less than
		B)	somewhat less than
		C)	about the same as
		D)	much more than


10	Trade as a diplomatic weapon
		A)	has never been tried.
		B)	has often been tried and is typically effective.
		C)	has often been tried and is typically ineffective.
		D)	has been tried twice and both times it worked to achieve the diplomatic goal.

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