EC 340 Study Guide - Midterm Guide: Gross Domestic Product, Absolute Advantage, Comparative Advantage

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copperbat150

2 Oct 2016

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Value added: factors that explain trade patterns a. Import tariffs and transport costs. (low tariffs and transport costs promote world trade: trade between similar countries. (large trade flows between the us and europe) c. Labor, capital and natural resources. (developing countries vs developed countries: trade compared with gdp: a ratio of trade to a country"s gross domestic product (gdp, 2010, the us, 15%. Most other countries have a higher ratio. b. In general, economic size larger, the ratio lower; economic size smaller, the ratio higher: trade barriers: all factors that influence the amount of goods and services shipped across international borders, transportation costs b. Import tariffs: wars and natural disasters, different periods of international trade a. First golden age (1890-1913 before wwi): a great increase in the amount of international trade because of improvement in transportation, steamships and railroad. b. Interwar period (wwi-wwii): smoot-hawley tariff act =high tariffs, great depression c.

Question 1

In 2003, the ________ ruled that U.S. tariffs on steel imported from the EU were unfair and allowed the EU to issue retaliatory tariffs on U.S. products.

World Trade Organization

United Nations

European Central Bank

International Human Rights Commission

Question 2

The idea of the U.S.-Canadian Free-Trade Agreement that ________ barriers to trade including tariffs and quotas between the United States and Canada by 1998 was to increase the amount that the United States exports to Canada and the amount that the United States imports from Canada.

increased all

removed some

removed all

increased some

Question 3

According to the theory of comparative advantage, a country should specialize and ________ goods with ________ opportunity cost.

import; the lowest

import; negative

export; the lowest

export; the highest

Question 4

A quota is a restriction on imports.

True

False

Question 5

If Holland decreases subsidies to its tulip growers, the price of tulips in the United States will rise.

True

False

Question 6

According to comparative advantage, trade between two countries allows ________ of the trading countries to use its resources most efficiently.

only the smaller

only the larger

neither

each

Question 7

________ U.S. president(s) who has/have held office since GATT was signed has argued for free-trade policies, yet each one has used his powers to protect various sectors of the economy.

Only one

No

Every

Only 3

Question 8

In 1991, the European Union began the process of forming the

		largest free-trade zone in the world.
		only continental military force in the world.
		first international trade agreement in the world.
		first unified currency in the world.

Question 9
1. The Smoot-Hawley tariff set off an international trade war in the
  
  1930s.
  
  1950s.
  
  1970s.
  
  1990s.
  
  Please help me with these questions Thank you.

magentadeer293

"Assume that Country A and Country B use different floating currencies and trade exclusively with one another. There is a revaluation (appreciation) of Country A's currency against Country B's currency. Assume that just prior to the revaluation, Country A and Country B have a perfect balance of trade, where each country imports the exact same value of goods and services from the other. Holding all else constant, what is the most likely impact of the revaluation of Country A's currency on the balance of trade between the two countries?"

		Country A will develop a trade surplus while Country B will develop a trade deficit.
		Country B will develop a trade surplus while Country A will develop a trade deficit.
		Country A will develop a trade surplus in the short term while Country B will develop a trade surplus in the long term.
		Because a simple change to the value of a currency is not likely to affect the balance of trade between two countries, the two countries will keep a perfect balance of trade.

graymarten520

The largest corporation based in the United States is:

A) General Motors.
B) ExxonMobil.
C) General Electric.
D) Microsoft.

Service exports from the United States equal _____ per year.

A) less than $100 billion
B) approximately $250 billion
C) less than $350 billion
D) approximately $500 billion

In addition to agricultural products and manufactured goods, the United States is also the world's largest exporter of:

A) processed and packaged foods.
B) pharmaceuticals.
C) electronics.
D) business services and retailing.

Before entering a country, marketers need to determine if the country has the required _____ to support their marketing efforts.

A) moral code
B) legal system
C) infrastructure
D) trade bodies

In order for a marketer to operate efficiently in a foreign country, it is crucial that a stable _____ be in place to facilitate trade.

A) free trade agreement
B) tariff
C) infrastructure
D) labor force

Which of the following is not a trade barrier to an exporter?

A) Tariffs
B) Import quotas
C) Subsidies
D) Related party trade

A complete ban on the import of a product is known as a(n):

A) import quota.
B) embargo.
C) revenue tariff.
D) protective tariff.

Exchange control is an administrative barrier to international trade that:

A) requires companies that export to sell foreign currencies to the central bank or other foreign agency, and importers to buy foreign currencies from the same organization.
B) supports domestic industry through grants of money or research support.
C) completely bans the importation of a product.
D) sells products in a foreign market cheaper than they are sold domestically.

When a group of nations agree to the free trade of goods among themselves by abolishing tariffs and trade restrictions, the nations have created a:

A) common market.
B) customs union.
C) trading block.
D) free-trade area.

10.

Which of the following is not an objective of the European Union(EU)?

A) eventually remove all trade barriers to free trade among its members.
B) standardize currencies and regulations between member nations.
C) promote the basic tenets of the WTO and GATT treaty.
D) eventually evolve into an independent political entity.

11.

An organization that provides first-time exporters with expertise in locating foreign buyers, handling paperwork, and conforming to local labeling and testing laws is called a(n):

A) export facilitator.
B) export title company.
C) trade assistance corporation.
D) export management company.

12.

McDonald

ivoryturtle973

EC 340 Study Guide - Midterm Guide: Gross Domestic Product, Absolute Advantage, Comparative Advantage

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