1.By specializing in the production of particular goods in which it has a comparative advantage, a nation is:A) less likely to make efficient use of available resources.
B) less likely to engage in international trade.
C) able to become self-sufficient.
D) able to operate efficiently.
2.Net exports equalA) exports imports.
B) domestic consumption foreign consumption.
C) foreign consumption domestic consumption.
D) imports exports.
3.If each nation specializes and produces those goods in which it has a(n) _______ advantage and trades with other countries, global production will be _______.A) absolute; increased
B) comparative; increased
C) comparative; reduced
D) money; increased4.Under a gold standard exchange rate system, a nation's money supply is regulated byA) world supply of gold.
B) the quantity of gold owned by a country.
C) the market forces of demand and supply of gold in the gold market.
D) world demand for gold.5.If two countries participate in free trade:A) every individual in each country will benefit.
B) both countries as a whole will gain from the trade.
C) one country will benefit, but the other country will experience reduced welfare..
D) neither country will benefit.6.Which of the following is not a trade barrier?A) tariffs
B) quota
C) an embargo
D) a growing sentiment in favor of "buying local"
7.A tax imposed by a country on an imported good or service is called aA) non-tariff barrier.
B) trade embargo.
C) quota.
D) tariff.
8.The concept of comparative advantage is based upon:A) absolute labor productivity.
B) relative labor costs.
C) dollar prices of labor.
D) relative opportunity costs.
9.The purchase of U.S. goods by foreigners generated a demand for U.S. dollars in the foreign currency market.A) True
B) False10.If income increases in other countries, then U.S.A) imports will increase.
B) exports will decrease.
C) exports will increase.
D) imports will decrease.