ECO 336 USM Midterm Exam Questions and Answers 100% Pass |Verified and Updated

ECO 336 USM Midterm
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1. An important factor that increased international capital flows in the second
half of the nineteenth century was
A.technological innovations.
B.the rapid rate of East Asian economic growth.
C.the creation of the International Monetary Fund.
D.the creation of numerous regional trade agreements.: A
2. The four criteria for economic integration include trade flows, capital flows,
people flows, and the similarity of prices in separate markets.

True
False: True
3. Since the end of World War II,
A. world trade has grown more slowly than world GDP in the same time period.
B. world trade has grown more rapidly than world output.
C. the trade-to-GDP ratios of most countries have fallen.
D. trade is less important to most nations' economies than in the early part of
the twentieth century.
E. world trade has grown more slowly than during the years leading up to World
War II.: B
4. Deep integration
A.is easier to achieve than shallow integration.
B.does not require changing domestic policies unrelated to tariffs and quotas.
C.requires cooperation with other national governments or international bod-
ies.
D.is less controversial than shallow integration.: C
5. One important difference between the international economy of today and
the economy of 100 years ago is
A.
that price differences in different markets have narrowed.
B.
the presence of international bodies such as the IMF and World Bank.
C.


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that capital is mobile.
D.
for the first time, technological innovations have reduced the barrier of dis-
tance.
E.
that labor is so much more mobile.: B
6. While the world was fairly integrated at the turn of the last century, most trade
was in agricultural and raw materials, whereas today manufactured consumer
and producer goods play a much greater role in determining exports and
imports.
True
False: True
7. Labor mobility was
A.
less in 1900 than in 2010.
B.
unimportant to global integration until the 1960s.
C.
greater in 1900 than in 2010.
D.
never controversial.: C
8. One of the reasons we know that international labor mobility has been higher
at other times is because
A.
labor was important in agriculture.
B.
the population was younger.
C.
the percent of our population that was foreign born was higher.
D.
wages were lower.: C



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9. Suppose Turkey has exports of 2 billion Turkish Lira, while its imports are 2
billion Turkish Lira. Calculate Turkey's "Index of Openness" (Trade-to-GDP ratio)
assuming Turkey has 10 billion Turkish Lira of output, or GDP.: Turkey's Trade-to-GDP
ratio = . 4
.
(Enter your response rounded to one decimal place.)
10. The trade-to-GDP ratio for a nation that had $600 million in exports, $400
million in imports, and GDP of $2,000 million would be
A. 0.5
B. 0.2
C. -0.1
D. 0.1: A
11. Capital flows between countries are smaller than in past decades in absolute
terms.
True
False: False
12. Transactions costs in international financial markets are higher today than
they were in the past.
True
False: False
13. When world capital is allowed to flow freely between countries, it is expected
that capital will flow from
A.
countries with a high level of international trade to countries with lower levels
of international trade.
B.
countries with high income to countries with low income.
C.
countries with low income to countries with high income.
D.
countries with abundant savings and capital to countries with low savings and
capital.: D


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14. Your text mentions several ways that international trade flows are qualita-
tively different than they were a century ago. Which of the following is NOT
one of those ways?
A.
International trade in raw commodities and agricultural products is more im-
portant than it was in the past.
B.
Firms' investment spending on capital goods is more important than in the
past.
C.
It is possible to trade some types of services in a way that was not possible in
the past.
D.
Multinational corporations play a bigger role in production than they did in the
past.: A
15. The elimination or reduction of trade barriers caused by non-trade-related
domestic policies is referred to as
A.
regional trade integration.
B.
quota reduction.
C.
deep integration.
Your answer is correct.
D.
shallow integration.: C
16. Free trade in goods is predicted to
A.
provide consumers with greater variety.
B.
provide consumers with lower prices.
C.