International Economics questions Part I Question d. c. b. a. efficiently than another country is referred to A nation's ability to produce a product more absolute advantage. interdependence. foreign trade. globalization. as Answer d. c. b. a. as efficiently than another country is referred to A nation's ability to produce a product more absolute advantage. interdependence. foreign trade. globalization. Question d. c. b. a. law of economics is known engage intrade that benefits both parties. This lobsters, and Maine specializes in the production of Nebraska relative distribution. comparative advantage. parallel consumption. supply demand. and therefore the specializes in the production of corn twostates could as Answer d. c. b. a. law of economics is known engage intrade that benefits both parties. This lobsters, and Maine specializes in the production of Nebraska relative distribution. comparative advantage. parallel consumption. supply demand. and therefore the specializes in the production of corn twostates could as Question d. c. b. a. informationgiven, CountryX whileY can Country produceBased on the 5million. widgets, CountryX can producewidgets, 10 million countries devote of theirall efforts to producing of population,area, capitaland stock. CountryY areCountryX and the samesizeterms in widgets. a lower costopportunity in theproductionof a comparative advantage inproducingwidgets. an absoluteadvantage inproducingwidgets. the production on a monopoly of widgets. has If both Answer d. c. b. a. informationgiven, CountryX whileY can Country produceBased on the 5million. widgets, CountryX can producewidgets, 10 million countries devote of theirall efforts to producing of population,area, capitaland stock. CountryY areCountryX and the samesizeterms in widgets. a lower costopportunity in theproductionof a comparative advantage inproducingwidgets. an absoluteadvantage inproducingwidgets. the production on a monopoly of widgets. has If both Question d. c. b. a. toof comparativeprinciples the advantage of clothes. units 1,000 of clothes. unitsof food unitsCountryX canproduce2,000 and 1,000 import additional clothes fromadditionalimportclothes Country to meetown their needs. Country from Country from Country Country Country Country Y should producefoodboth and shouldclothes,Y and producefoodY shouldboth X and clothesand producefoodshouldY clothes import and produceX shouldfood clothesimportand X. Y. Y can produce 1,000 units of foodunitscan Y produce and 1,000 In order to maximize tradeaccording Country , X. Answer d. c. b. a. toof comparativeprinciples the advantage of clothes. units 1,000 of clothes. unitsof food unitsCountryX canproduce2,000 and 1,000 import additional clothes fromadditionalimportclothes Country to meetown their needs. Country from Country from Country Country Country Country Y should producefoodboth and shouldclothes,Y and producefoodY shouldboth X and clothesand producefoodshouldY clothes import and produceX shouldfood clothesimportand X. Y. Y can produce 1,000 units of foodunitscan Y produce and 1,000 In order to maximize tradeaccording Country , X. Question d. c. b. a. imports, the balance of payments between the monetary value of exports and While the balance of trade is the difference transactions between countries. counts goods,and financial services, between countries. counts goods and the financial transactions counts only services. counts only goods. Answer d. c. b. a. imports, the balance of payments between the monetary value of exports and While the balance of trade is the difference transactions between countries. counts goods,and financial services, transactions between countries. counts goods and the financial counts only services. counts only goods. Question d. c. b. a. comparative Product production What happensto the The output of ProductThe output A increases tototal 800,000 units. of ProductThe output A decreases to30,000total units. of ProductThe output A increases to 60,000total units. of ProductThe output A decreases to0 total units. A asaresult of of advantage? Product B Product A Product B Product A Product Output BeforeOutput Specialization Tradeand Output AfterSpecializationOutput Trade and 800,000 500,000 20,000 U.S. U.S. - 0 - 60,000 30,000 30,000 Japan Japan - 0 - 800,000 530,000 60,000 50,000 Total Total Net Gain 270,000 10,000 Answer d. c. b. a. comparative Product production What happensto the The output of ProductThe output A increases tototal800,000 units. of ProductThe output A decreases to30,000total units. of ProductThe output A increases to 60,000total units. of ProductThe output A decreases to0 total units. A asaresult of of advantage? Product B Product A Product B Product A Product Output BeforeOutput Specialization Tradeand Output AfterSpecializationOutput Trade and 800,000 500,000 20,000 U.S. U.S. - 0 - 60,000 30,000 30,000 Japan Japan - 0 - 800,000 530,000 60,000 50,000 Total Total Net Gain 270,000 10,000 Question d. c. b. a. is and received from, nations other in trade The difference between money paid to, the comparative advantage. balance of payments. absolute advantage. balance of trade. Answer d. c. b. a. is and received from, nations other in trade The difference between money paid to, the comparative advantage. balance of payments. absolute advantage. balance of trade. Question d. c. b. a. a country hasa"trade deficit" is The BEST description ofasituation in which imports exceed theirexports exports exceed their imports unemployment exceeds 6% inflation exceeds 1% their Answer d. c. b. a. their which acountry has a "trade deficit" is The BEST description ofasituation in imports exceed their exports exportsexceed their imports unemployment exceeds 6% inflation exceeds 1% Question d. c. b. a. greater than its imports, that country has a When the value of acountry’s exports is negative balance of payments negative balance of trade positive balance of trade positive advantage Answer d. c. b. a. greater than its imports, that country has a When the value of acountry’s exports is negative balance of payments negative balance of trade positive balance of trade positive advantage Question d. c. b. a. deficitof tradea balance and surplus How can acountryhave payments abalanceof all transactions. account,the balanceofpayments and include tradeThe balanceof refers toonly thecurrent country’s totalGross National Product. paymentsThe balanceof is determined by the trade are measured indifferent months. paymentsThe balanceof the balanceof and isIt impossible. ? Answer d. c. b. a. deficitof tradea balance and surplus How can acountryhave payments abalanceof all transactions. account,the balanceofpayments and include tradeThe balanceof refers toonly thecurrent country’s totalGross National Product. paymentsThe balanceof is determined by the trade are measured indifferent months. paymentsThe balanceof the balanceof and isIt impossible. ?