INTB 334 Midterm Exam Problem Sets (1
& 2) Questions Fully Solved.
Currently, which of the following countries is the world's largest exporter of goods and services
(in dollar volume)? - Answer China
Which of the following transactions is NOT a trade flow? - Answer domestic residents'
purchases of foreign stocks and bonds
If the value of a nation's imports is more than the value of its exports, then the nation is
experiencing: - Answer a trade deficit
What entries are used to calculate a country's bilateral trade balance? - Answer its exports to
and imports from another country
Intel, an American company, has manufacturing plants in China that assemble U.S.-made
components. Suppose one of these plants produces and sells a computer chip to a Chinese
computer manufacturer. How is this sale recorded in U.S. international trade statistics? - Answer
It is considered to be neither a U.S. import nor a U.S. export
How many countries are members of the European Union as of May 2016? - Answer 28
What is the average tariff on intra-European Union trade? - Answer 0
What was Africa's share of world exports in 2014? - Answer .02
What does a country's gross domestic product (GDP) measure? - Answer the value of all final
goods produced in a year
Suppose that a country has a low ratio of trade to GDP. Which of the following may be a
possible explanation for this? - Answer the country is very large
The "first golden age" of trade was: - Answer 1890-1913
, Which one of the following factors will contribute to continued growth of trade among
countries? - Answer Negotiation of more free-trade areas among countries
More than one half of migration is - Answer from non-OECD countries to OECD countries
Which of the following is considered to be an outflow of foreign direct investment (FDI) from
the United States? - Answer General Motors invests $100 million to modernize its U.K. plant
that produces Vauxhall automobiles
Which of the following is NOT a reason for a firm to engage in horizontal FDI? - Answer It may
want to avoid tariffs in its home market.
Which of the following statements is an example of vertical FDI? - Answer GM opens a plant in
India
David Ricardo's model explains trade based on: - Answer technology
When a firm in one nation purchases unfinished products internationally and adds further
processing to sell in the domestic market, this is known as: - Answer offshoring
The Ricardian model focuses on how differences in _________ influence international trade
patterns - Answer comparative costs
Mercantilists believed that: - Answer exports are good and imports are bad for the economy
Assume the MPLt = 5 tennis rackets and MPLb = 4 baseball bats. If the economy has 100
workers, then the economy can produce: - Answer a maximum of 500 tennis rackets.
As a consumer moves down one of her indifference curves, her satisfaction: - Answer remains
unchanged
(Figure: Home Production and Consumption) The figure gives Home's international trading
pattern. Point P is production with trade and point C is consumption with trade. How many
units of which product does Home export and how many units of which product does it import?
- Answer Home exports 20 units of chemicals and imports 40 units of clothing
& 2) Questions Fully Solved.
Currently, which of the following countries is the world's largest exporter of goods and services
(in dollar volume)? - Answer China
Which of the following transactions is NOT a trade flow? - Answer domestic residents'
purchases of foreign stocks and bonds
If the value of a nation's imports is more than the value of its exports, then the nation is
experiencing: - Answer a trade deficit
What entries are used to calculate a country's bilateral trade balance? - Answer its exports to
and imports from another country
Intel, an American company, has manufacturing plants in China that assemble U.S.-made
components. Suppose one of these plants produces and sells a computer chip to a Chinese
computer manufacturer. How is this sale recorded in U.S. international trade statistics? - Answer
It is considered to be neither a U.S. import nor a U.S. export
How many countries are members of the European Union as of May 2016? - Answer 28
What is the average tariff on intra-European Union trade? - Answer 0
What was Africa's share of world exports in 2014? - Answer .02
What does a country's gross domestic product (GDP) measure? - Answer the value of all final
goods produced in a year
Suppose that a country has a low ratio of trade to GDP. Which of the following may be a
possible explanation for this? - Answer the country is very large
The "first golden age" of trade was: - Answer 1890-1913
, Which one of the following factors will contribute to continued growth of trade among
countries? - Answer Negotiation of more free-trade areas among countries
More than one half of migration is - Answer from non-OECD countries to OECD countries
Which of the following is considered to be an outflow of foreign direct investment (FDI) from
the United States? - Answer General Motors invests $100 million to modernize its U.K. plant
that produces Vauxhall automobiles
Which of the following is NOT a reason for a firm to engage in horizontal FDI? - Answer It may
want to avoid tariffs in its home market.
Which of the following statements is an example of vertical FDI? - Answer GM opens a plant in
India
David Ricardo's model explains trade based on: - Answer technology
When a firm in one nation purchases unfinished products internationally and adds further
processing to sell in the domestic market, this is known as: - Answer offshoring
The Ricardian model focuses on how differences in _________ influence international trade
patterns - Answer comparative costs
Mercantilists believed that: - Answer exports are good and imports are bad for the economy
Assume the MPLt = 5 tennis rackets and MPLb = 4 baseball bats. If the economy has 100
workers, then the economy can produce: - Answer a maximum of 500 tennis rackets.
As a consumer moves down one of her indifference curves, her satisfaction: - Answer remains
unchanged
(Figure: Home Production and Consumption) The figure gives Home's international trading
pattern. Point P is production with trade and point C is consumption with trade. How many
units of which product does Home export and how many units of which product does it import?
- Answer Home exports 20 units of chemicals and imports 40 units of clothing
