1
Econ 306 Final Prep Questions with Correct
Answers | Updated (100% Correct Answers)
In the United States, the proposed North American Free Trade
Agreement was generally supported by... Answer: Hi-skill labor
Suppose that the United States, Canada, and Mexico abolish all
tariffs on each other's goods and eliminate all restrictions on
movements of resources between each other. They also adopt a
common protectionist policy toward other countries. The three
countries further maintain their own respective monetary and fiscal
policies. This is an example of a (an)... Answer: Common Market
The sum of all of the debit items in the balance of payments:
Answer: Is = to the sum of all credit items in the balance of
payments
Which of the following statements is TRUE? Answer: The world
bank was created as a result of the Bretton Woods Conference
Deadweight losses from tariffs and quotas in high-income countries
Answer: have been reduced since the mid-1990s.
Which of the following is a TRUE statement? Answer: There are
asymmetric incentives to support and to oppose protectionist trade
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, 2
policies, with the stronger incentives going to those that would seek
protection.
If a country faces action under Section 301 of the U.S. Trade Act of
1974, it means that the country has Answer: been charged by the
United States with systematically engaging in unfair trade practices.
A nation is called a lender if: Answer: its current account is in
surplus during a time period.
Which of the following is NOT true about the national income
identity given by the equation: S + T - G - I = NX Answer: If NX is
negative, our investment is less than our national savings.
Which of the following is NOT part of the current account? Answer:
Purchase of a foreign bond
Suppose that there are only two countries, the U.S. and Japan. If real
interest rates rise in Japan, which of the following is NOT true?
Answer: More Japanese yen will be supplied in exchange for dollars.
The nominal interest rate in the U.S. is 5% and the nominal interest
rate in Canada is 3%. The spot value of the U.S. dollar is 1
($/Canadian dollar) and the forward rate is 1.2 ($/Canadian dollar).
Which of the following is NOT true? Answer: The dollar is likely to
appreciate in spot markets.
© 2025 All rights reserved
Econ 306 Final Prep Questions with Correct
Answers | Updated (100% Correct Answers)
In the United States, the proposed North American Free Trade
Agreement was generally supported by... Answer: Hi-skill labor
Suppose that the United States, Canada, and Mexico abolish all
tariffs on each other's goods and eliminate all restrictions on
movements of resources between each other. They also adopt a
common protectionist policy toward other countries. The three
countries further maintain their own respective monetary and fiscal
policies. This is an example of a (an)... Answer: Common Market
The sum of all of the debit items in the balance of payments:
Answer: Is = to the sum of all credit items in the balance of
payments
Which of the following statements is TRUE? Answer: The world
bank was created as a result of the Bretton Woods Conference
Deadweight losses from tariffs and quotas in high-income countries
Answer: have been reduced since the mid-1990s.
Which of the following is a TRUE statement? Answer: There are
asymmetric incentives to support and to oppose protectionist trade
© 2025 All rights reserved
, 2
policies, with the stronger incentives going to those that would seek
protection.
If a country faces action under Section 301 of the U.S. Trade Act of
1974, it means that the country has Answer: been charged by the
United States with systematically engaging in unfair trade practices.
A nation is called a lender if: Answer: its current account is in
surplus during a time period.
Which of the following is NOT true about the national income
identity given by the equation: S + T - G - I = NX Answer: If NX is
negative, our investment is less than our national savings.
Which of the following is NOT part of the current account? Answer:
Purchase of a foreign bond
Suppose that there are only two countries, the U.S. and Japan. If real
interest rates rise in Japan, which of the following is NOT true?
Answer: More Japanese yen will be supplied in exchange for dollars.
The nominal interest rate in the U.S. is 5% and the nominal interest
rate in Canada is 3%. The spot value of the U.S. dollar is 1
($/Canadian dollar) and the forward rate is 1.2 ($/Canadian dollar).
Which of the following is NOT true? Answer: The dollar is likely to
appreciate in spot markets.
© 2025 All rights reserved
