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International Economics practice problem.pdf

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Department
Economics
Course
ECON 1BB3
Professor
Bridget O' Shaughnessy
Semester
Winter

Description
Chapter 31 International Economy Practice Test Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. Ivan, a Russian citizen, sells several hundred cases of caviar to a restaurant chain in the United States. By itself this sale a. increases U.S. net exports and has no effect on Russian net exports. b. increases U.S. net exports and decreases Russian net exports. c. decreases U.S. net exports and has no effect on Russian net exports. d. decreases U.S. net exports and increases Russian net exports. ____ 2. Francisco, a Portuguese citizen, orders textbooks from a publisher in America. By itself this sale a. increases U.S. net exports and has no effect on Portuguese net exports. b. increases U.S. net exports and decreases Portuguese net exports. c. decreases U.S. net exports and has no effect on Portuguese net exports. d. decreases U.S. net exports and increases Portuguese net exports. ____ 3. Mike, a U.S. citizen, buys $10 of cheese from France. His action alone a. increases U.S. exports by $10 and increases U.S. net exports by $10. b. increases U.S. exports by $10 and decreases U.S. net exports by $10. c. increases U.S. imports by $10 and increases U.S. net exports by $10. d. increases U.S. imports by $10 and decreases U.S. net exports by $10. ____ 4. In the second quarter of 2000, U.S. net exports were about -$340 billion and imports were about $1,380 billion. Therefore, exports were about a. $1,720 billion. b. $1,040 billion. c. $340 billion. d. None of the above are correct. ____ 5. Suppose that Canada has positive net exports. Then Canada a. sells more abroad than it purchases abroad and has a trade surplus. b. sells more abroad than it purchases abroad and has a trade deficit. c. buys more abroad than it sells abroad and has a trade surplus. d. may have any of the above; more information is necessary. ____ 6. The U.S. economy, over the years, has become a. more closed. b. more open. c. less trade-oriented. d. more self-sufficient. ____ 7. Net foreign investment refers to a. the purchase of foreign assets by domestic residents minus the purchase of foreign goods and services by domestic residents. b. the purchase of f
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