International Economics Questions

A nation's balance-of-payments statement records all financial transactions between its residents and those of the rest of the world during a given period of time. True False

The Organization for Economic Cooperation and Development (OECD) estimates that the economies of the developed world will expand at much faster rates when compared to the developing economies. True False

A voluntary export restraint (VER) is generally imposed under the threat of stiffer quotas and tariffs being set by the importing country if a VER is not established. True False

The reserves account is a record of direct investment, portfolio investment, and short-term capital movements to and from countries. True False

You and two of your friends decide to open an e-business selling a product online. Instead of all three partners creating the product, you each specialize in one aspect of the business. This is MOST reflects the concept of(D)

· Value of $1 U.S. in pesos is 10.34· Value of 1 Peso in U.S. Dollars is $0.09 Shelby traveled to Mexico to a resort and took $100 in U.S. currency. When she exchanged it for pesos, she received(D)

I. the European UnionII. ASEANIII. OPECIV. NAFTA People who support free trade would MOST LIKELY support the efforts of which of these organizations??(C)

The Gains from TradeOutput Before Specialization and TradeU.S. Japan Total Product A 20,000 30,000 50,000 Product B 500,000 30,000 530,000 Output After Specialization and TradeU.S. Japan Total Net GainProduct A 0 60,000 60,000 10,000Product B 800,000 0 800,000 270,000 What happens to the production of Product A as a result of comparative advantage?(B)

Since the 1980s, Australia has increased its role in international trade significantly. Which of these actions would have helped to achieve this result?(B)

If the the United States imports $100 million of goods and exports $150 million, what does the United States have?(B)

Trade Costs in AfricaWorld Bank Document, September 2008High trade costs—for transporting goods and getting them across borders—have a negative impact on prospects for expanding African trade, making producers less competitive.While reducing tariffs and other trade barriers remains important, and must continue as part of the liberalization process, many African countries will not be able to benefit from reform unless trade costs are reduced. Bottlenecks in the form of regulatory and administrative constraints to transport and transit must also be reduced. Customs procedures, duty drawback schemes, and other requirements push up the cost of trade. Which statement would MOST LIKELY be claimed by the author of this passage?(A)

Tariffs and import duties will protect American businesses from unfair competition by countries like China and Japan. This sounds MOST like an argument against(A)

Imposing some sort of cost on trade that raises the price of the traded products is MOST LIKELY an example of(A)

On May 13, 2005, Benjamin Wu, the Department of Commerce's assistant secretary for technology policy delivered this testimony to the House of Representatives Committee on Government Reform.(excerpt)"Mr. Chairman and members of the Committee, thank you for the opportunity to address your concerns on the use of domestic source restrictions by foreign governments.Since standards and technical regulations affect over 80 percent of global commodity trade, domestic source restrictions by foreign governments, in the form of standards as trade barriers, are a concern and have prompted the Department of Commerce to take recent action.The Department of Commerce is committed to ensuring that standards are fair and responsive to market and technology needs, and that we partner with industry to combat standards as trade barriers to American goods and services.While U.S. standards concerns are not specific to just China, because American industry has demonstrated a clear interest to compete and participate in the Chinese marketplace, it is important that there is a standards development process that is open, transparent, participatory, and fair in China. In 2004, China was the United States' third largest trading partner, with total merchandise trade between the two nations reaching $231 billion. The United States exported over $35 billion of merchandise to China, an increase of over 25 percent over the previous year.Tensions have arisen, however, when certain countries take restrictive action that could potentially exclude market access to U.S. businesses. In this regard, I have been asked by the Committee to address a specific example where China has caused great concern with U.S. industry in its application of domestic source requirement standards - China's pending software procurement regulation which could limit the ability of U.S. industry to sell software products and services to the Chinese government. U.S. software companies, which are widely recognized as industry leaders for their leading-edge innovation, have invested billions of dollars in China to participate directly in China's growing information technology market. This is especially necessary to combat and offset the perceived high rate of software piracy in China.The U.S. Department of Commerce, along with the Department of State and Office of the U.S. Trade Representative, have been working hard to ensure that U.S. software companies continue to have access to Chinese government customers. We will continue to work vigorously to achieve this goal." Which quote from the passage represents a specific example of a trade barrier?(A)

The September 27, 2003, Toronto Star had a headline reading, "Global Economy is Shifting Focus to East Asia". The article MOST LIKELY references(A)

Because Nebraska specializes in the production of corn and Maine specializes in the production of lobsters, the two states could engage in trade that benefits both parties. This law of economics is known as(C)

This map highlights (in dark blue) the organization founded in the 1960s known as(A)

A Weak Dollarby The Columbus Dispatch, September 7, 1999If the price of buying a car starts rising in the United States, consumers may need to look no further than the dollar's recent slide against major foreign currencies.On the other hand, economically depressed Midwestern farmers may find it easier to sell surplus grain overseas if a weak dollar makes it cheaper for foreigners to buy U.S. goods.The dollar spent much of last week on the skids, flirting with its lowest level of the year against the Japanese yen...It also has lost ground to the Euro. According to the passage, Midwestern farmers have surplus grain to sell. This is an example of(D)

Travis takes two trips to Ecuador. On his first trip, he finds that one US dollar is worth 25000 Ecuadorian Sucre. On his return trip, he finds that the dollar is now worth 26000 Ecuadorian Sucre. What is a LIKELY result of this change in exchange rates?(B)

If a U.S. citizen could buy £25,000 for $100,000, the rate of exchange for the pound would be(C)