ECO 336 STUDY GUIDE ELITE REVIEW WITH
COMPREHENSIVE SOLVED QUESTIONS AND
DETAILED ANSWERS
◉The four criteria for economic integration include trade flows, capital
flows, people flows, and the similarity of prices in separate markets.
True
False Answer: True
◉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. Answer: B
◉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
bodies.
D.is less controversial than shallow integration. Answer: C
◉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.
that capital is mobile.
D.
for the first time, technological innovations have reduced the barrier of
distance.
E.
that labor is so much more mobile. Answer: B
◉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 Answer: True
◉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. Answer: C
◉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. Answer: C
◉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. Answer: Turkey's Trade-to-GDP ratio = . 4
.
(Enter your response rounded to one decimal place.)
◉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 Answer: A
◉Capital flows between countries are smaller than in past decades in
absolute terms.
True
False Answer: False
COMPREHENSIVE SOLVED QUESTIONS AND
DETAILED ANSWERS
◉The four criteria for economic integration include trade flows, capital
flows, people flows, and the similarity of prices in separate markets.
True
False Answer: True
◉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. Answer: B
◉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
bodies.
D.is less controversial than shallow integration. Answer: C
◉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.
that capital is mobile.
D.
for the first time, technological innovations have reduced the barrier of
distance.
E.
that labor is so much more mobile. Answer: B
◉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 Answer: True
◉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. Answer: C
◉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. Answer: C
◉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. Answer: Turkey's Trade-to-GDP ratio = . 4
.
(Enter your response rounded to one decimal place.)
◉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 Answer: A
◉Capital flows between countries are smaller than in past decades in
absolute terms.
True
False Answer: False
