, Chapter 1: Trade in the Global Economy
What country was the world's largest exporter of goods in 2012?
China
Germany
the United States
Japan
Ans: A Difficulty: Easy Section: Introduction Skill Descriptor: Fact-
Based Topic: Introduction
Which of the following is a trade flow?
Robert Feenstra purchases $100 million of British treasury bonds.
Robert Feenstra purchases a yogurt factory in France.
Neither of Robert Feenstra's purchases is considered a trade flow.
Both of Robert Feenstra's purchases are considered trade flows. Ans:
C Difficulty: Easy Section: Introduction
Skill Descriptor: Definitional Topic: Introduction
Currently, which of the following countries is the world's largest exporter of goods (in
dollar volume)?
China
the United States
Japan
Germany
Ans: A Difficulty: Moderate Section: Introduction
Skill Descriptor: Fact-Based Topic: Introduction
Currently, which of the following countries is the world's largest exporter of goods and
services (in dollar volume)?
China
the United States
Japan
Germany
Ans: B Difficulty: Moderate Section: Introduction
Skill Descriptor: Fact-Based Topic: Introduction
What is the term for a capital flow that is used to purchase or build a tangible asset like a
factory?
migration
service exports
service imports
foreign direct investment
Ans: D Difficulty: Easy Section: Introduction
Skill Descriptor: Definitional Topic: Introduction
, Chapter 1: Trade in the Global Economy
When a foreign resident purchases a good or service from someone in the United States,
the transaction is:
a U.S. export.
a U.S. import.
bilateral exchange.
a compensating differential.
Ans: A Difficulty: Easy Section: International Trade
Skill Descriptor: Definitional Topic: The Basics of World Trade
Imports are:
goods or services purchased from a foreign resident.
goods or services sold to foreign residents.
goods only purchased from foreigners—you cannot purchase services from foreigners.
services only—imports do not include goods.
Ans: A Difficulty: Easy Section: International Trade
Skill Descriptor: Definitional Topic: The Basics of World Trade
Exports are:
goods or services purchased from a foreign resident.
goods or services sold to foreign residents.
goods only sold to foreigners—you cannot sell services to foreigners.
services only—exports do not include goods.
Ans: B Difficulty: Easy Section: International Trade
Skill Descriptor: Definitional Topic: The Basics of World Trade
Which of the following entries is considered to be a service export?
the Japanese buying soybeans from the United States
the Chinese selling iPhones to the United States
Mexican tourists visiting the Grand Canyon
the French selling wine to the United States
Ans: C Difficulty: Moderate Section: International Trade
Skill Descriptor: Concept-Based Topic: The Basics of World Trade
Which of the following transactions is NOT a trade flow?
domestic residents' purchases of foreign-made goods
domestic residents' purchases of foreign-provided services
domestic residents' purchases of foreign stocks and bonds
domestic residents' purchases of foreign-produced software Ans: C
Difficulty: Easy Section: International Trade
Skill Descriptor: Definitional Topic: The Basics of World Trade
Page 2
, Chapter 1: Trade in the Global Economy
A country's service exports include:
a restaurant meal purchased by its resident in another country.
equipment or automobiles with a warranty and a service contract sold to a foreign
resident.
a ticket on a country's airline sold to a foreign resident.
a country's resident who migrates to work in another country.
Ans: C Difficulty: Moderate Section: International Trade
Skill Descriptor: Concept-Based Topic: The Basics of World Trade
The difference between the total value of a country's exports and the total value of its
imports is defined as the country's:
trade status.
trade balance.
trade deficit.
bilateral trade balance.
Ans: B Difficulty: Easy Section: International Trade
Skill Descriptor: Definitional Topic: The Basics of World Trade
An American tourist buys a ticket to an opera in Paris. The U.S. government classifies this
transaction as:
a goods' import of a French Opera.
a service export.
a service import.
a goods' export.
Ans: C Difficulty: Difficult Section: International Trade
Skill Descriptor: Concept-Based Topic: The Basics of World Trade
A Chinese student pays tuition at a U.S. university. The Chinese government classifies this
transaction as:
a goods' import.
a service export.
a service import.
a goods' export.
Ans: C Difficulty: Difficult Section: International Trade
Skill Descriptor: Concept-Based Topic: The Basics of World Trade
If the value of a nation's imports is more than the value of its exports, then the nation is
experiencing:
a trade deficit.
a trade surplus.
Page 3
What country was the world's largest exporter of goods in 2012?
China
Germany
the United States
Japan
Ans: A Difficulty: Easy Section: Introduction Skill Descriptor: Fact-
Based Topic: Introduction
Which of the following is a trade flow?
Robert Feenstra purchases $100 million of British treasury bonds.
Robert Feenstra purchases a yogurt factory in France.
Neither of Robert Feenstra's purchases is considered a trade flow.
Both of Robert Feenstra's purchases are considered trade flows. Ans:
C Difficulty: Easy Section: Introduction
Skill Descriptor: Definitional Topic: Introduction
Currently, which of the following countries is the world's largest exporter of goods (in
dollar volume)?
China
the United States
Japan
Germany
Ans: A Difficulty: Moderate Section: Introduction
Skill Descriptor: Fact-Based Topic: Introduction
Currently, which of the following countries is the world's largest exporter of goods and
services (in dollar volume)?
China
the United States
Japan
Germany
Ans: B Difficulty: Moderate Section: Introduction
Skill Descriptor: Fact-Based Topic: Introduction
What is the term for a capital flow that is used to purchase or build a tangible asset like a
factory?
migration
service exports
service imports
foreign direct investment
Ans: D Difficulty: Easy Section: Introduction
Skill Descriptor: Definitional Topic: Introduction
, Chapter 1: Trade in the Global Economy
When a foreign resident purchases a good or service from someone in the United States,
the transaction is:
a U.S. export.
a U.S. import.
bilateral exchange.
a compensating differential.
Ans: A Difficulty: Easy Section: International Trade
Skill Descriptor: Definitional Topic: The Basics of World Trade
Imports are:
goods or services purchased from a foreign resident.
goods or services sold to foreign residents.
goods only purchased from foreigners—you cannot purchase services from foreigners.
services only—imports do not include goods.
Ans: A Difficulty: Easy Section: International Trade
Skill Descriptor: Definitional Topic: The Basics of World Trade
Exports are:
goods or services purchased from a foreign resident.
goods or services sold to foreign residents.
goods only sold to foreigners—you cannot sell services to foreigners.
services only—exports do not include goods.
Ans: B Difficulty: Easy Section: International Trade
Skill Descriptor: Definitional Topic: The Basics of World Trade
Which of the following entries is considered to be a service export?
the Japanese buying soybeans from the United States
the Chinese selling iPhones to the United States
Mexican tourists visiting the Grand Canyon
the French selling wine to the United States
Ans: C Difficulty: Moderate Section: International Trade
Skill Descriptor: Concept-Based Topic: The Basics of World Trade
Which of the following transactions is NOT a trade flow?
domestic residents' purchases of foreign-made goods
domestic residents' purchases of foreign-provided services
domestic residents' purchases of foreign stocks and bonds
domestic residents' purchases of foreign-produced software Ans: C
Difficulty: Easy Section: International Trade
Skill Descriptor: Definitional Topic: The Basics of World Trade
Page 2
, Chapter 1: Trade in the Global Economy
A country's service exports include:
a restaurant meal purchased by its resident in another country.
equipment or automobiles with a warranty and a service contract sold to a foreign
resident.
a ticket on a country's airline sold to a foreign resident.
a country's resident who migrates to work in another country.
Ans: C Difficulty: Moderate Section: International Trade
Skill Descriptor: Concept-Based Topic: The Basics of World Trade
The difference between the total value of a country's exports and the total value of its
imports is defined as the country's:
trade status.
trade balance.
trade deficit.
bilateral trade balance.
Ans: B Difficulty: Easy Section: International Trade
Skill Descriptor: Definitional Topic: The Basics of World Trade
An American tourist buys a ticket to an opera in Paris. The U.S. government classifies this
transaction as:
a goods' import of a French Opera.
a service export.
a service import.
a goods' export.
Ans: C Difficulty: Difficult Section: International Trade
Skill Descriptor: Concept-Based Topic: The Basics of World Trade
A Chinese student pays tuition at a U.S. university. The Chinese government classifies this
transaction as:
a goods' import.
a service export.
a service import.
a goods' export.
Ans: C Difficulty: Difficult Section: International Trade
Skill Descriptor: Concept-Based Topic: The Basics of World Trade
If the value of a nation's imports is more than the value of its exports, then the nation is
experiencing:
a trade deficit.
a trade surplus.
Page 3
