ECO 336
ECO 336 USM MIDTERM EXAM 2025
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. - Correct Ans-A
The four criteria for economic integration include trade flows, capital flows, people flows,
and the similarity of prices in separate markets.
True
False - Correct Ans-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.
- Correct Ans-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. - Correct Ans-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. - Correct Ans-B
ECO 336
,ECO 336
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 - Correct Ans-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. - Correct Ans-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. - Correct Ans-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. - Correct Ans-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 - Correct Ans-A
Capital flows between countries are smaller than in past decades in absolute terms.
True
False - Correct Ans-False
ECO 336
,ECO 336
Transactions costs in international financial markets are higher today than they were in
the past.
True
False - Correct Ans-False
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. -
Correct Ans-D
Your text mentions several ways that international trade flows are qualitatively 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 important 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. -
Correct Ans-A
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. - Correct Ans-C
Free trade in goods is predicted to
A.
provide consumers with greater variety.
ECO 336
, ECO 336
B.
provide consumers with lower prices.
C.
increase competition for workers and firms.
D.
All of the above. - Correct Ans-D
Statistical empirical evidence consistently shows that countries that are more open
A.
experience persistent price gaps with other countries.
B.
tend to grow faster than countries that are closed.
C.
are more likely to run trade deficits.
D.
experience more rapid rates of capital outflow. - Correct Ans-B
A key institution that did NOT directly arise from post-WWII negotiations was the
A.
WTO.
B.
World Bank (IBRD).
C.
GATT.
D.
IMF. - Correct Ans-A
An example of foreign direct investment is
A.
a Mexican buying dollars for pesos.
B.
building a Starbucks shop in Canada.
C.
buying stock in a German company.
D.
All of the above. - Correct Ans-B
Most of what we buy and sell never makes it out of domestic markets.
True
False - Correct Ans-True
Economists
A.
believe that changing domestic policies affecting trade is a relatively simple process.
B.
describe reducing tariffs and quotas as deep integration.
ECO 336
ECO 336 USM MIDTERM EXAM 2025
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. - Correct Ans-A
The four criteria for economic integration include trade flows, capital flows, people flows,
and the similarity of prices in separate markets.
True
False - Correct Ans-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.
- Correct Ans-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. - Correct Ans-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. - Correct Ans-B
ECO 336
,ECO 336
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 - Correct Ans-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. - Correct Ans-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. - Correct Ans-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. - Correct Ans-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 - Correct Ans-A
Capital flows between countries are smaller than in past decades in absolute terms.
True
False - Correct Ans-False
ECO 336
,ECO 336
Transactions costs in international financial markets are higher today than they were in
the past.
True
False - Correct Ans-False
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. -
Correct Ans-D
Your text mentions several ways that international trade flows are qualitatively 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 important 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. -
Correct Ans-A
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. - Correct Ans-C
Free trade in goods is predicted to
A.
provide consumers with greater variety.
ECO 336
, ECO 336
B.
provide consumers with lower prices.
C.
increase competition for workers and firms.
D.
All of the above. - Correct Ans-D
Statistical empirical evidence consistently shows that countries that are more open
A.
experience persistent price gaps with other countries.
B.
tend to grow faster than countries that are closed.
C.
are more likely to run trade deficits.
D.
experience more rapid rates of capital outflow. - Correct Ans-B
A key institution that did NOT directly arise from post-WWII negotiations was the
A.
WTO.
B.
World Bank (IBRD).
C.
GATT.
D.
IMF. - Correct Ans-A
An example of foreign direct investment is
A.
a Mexican buying dollars for pesos.
B.
building a Starbucks shop in Canada.
C.
buying stock in a German company.
D.
All of the above. - Correct Ans-B
Most of what we buy and sell never makes it out of domestic markets.
True
False - Correct Ans-True
Economists
A.
believe that changing domestic policies affecting trade is a relatively simple process.
B.
describe reducing tariffs and quotas as deep integration.
ECO 336
