Econ321 chapter 1 question 1-50
What country was the world's largest exporter of goods in 2012?
China
Germany
The United States
Japan
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.
Currently, which of the following countries is the world's largest exporter of goods (in dollar volume)?
China
The United States
Japan
Germany
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
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
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
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.
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.
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
Which of the following transactions is NOT a trade flow?
Domestic residents' purchases of foreignmade goods
Domestic residents' purchases of foreignprovided services
Domestic residents' purchases of foreign stocks and bonds
Domestic residents' purchases of foreignproduced software
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.
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.
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.
A Chinese student pays tuition at a U.S. university. The Chinese government classifies this transaction as:
A goods' import.
A service import.
A service export.
A goods' export.
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.
Balanced trade.
A trade balance.
If country X has a GDP of $1 trillion and exports $200 billion to country Y and imports $300 billion from country Y, then its bilateral trade balance with country Y is:
$100 billion.
$100 billion.
$500 billion.
50%.
Which of the following is classified as a United States service export?
Rene LaFrancois, a French citizen, has her hair dyed in a New York hair salon
Miguel Ramirez, a Mexican citizen, gets paid for working in a Kansas vegetablecanning factory.
Harvey Guelph, a U.S. citizen, gets his haircut in a British barber shop
Marie Thompson, a U.S. citizen, purchases a bottle of champagne in a French grocery store.
The difference in value between a nation's exports and imports is called
Its trade deficit.
Its bilateral trade balance.
Balanced trade.
Its trade balance.
Whenever the value of a nation's exports is more than the value of its imports, the nation has:
A trade deficit.
A trade surplus.
Balanced trade.
A trade balance.
Whenever the value of a nation's exports is less than the value of its imports, the nation has:
A trade deficit.
A trade surplus.
Balanced trade.
A trade balance.
Whenever the value of a nation's exports equals the value of its imports, the nation is experiencing:
A trade deficit.
Balanced trade.
A trade surplus.
A trade balance.
A bilateral trade balance is
Half the trade deficit.
The measure of imports only—not exports.
The difference between the value of imports and exports between two trading nations
The sum of the value of imports and exports traded between two nations
What entries are used to calculate a country's bilateral trade balance?
Its unemployment and inflation rates
Its exports to and imports from another country.
Its per capita income and imports
Its exports and per capita income
Which of the following statements about the United StatesChina bilateral trade balance is correct
It is a good indicator of the inequality of imports and exports between the United States and China
It vastly understates the gap in imports and exports between the United States and China.
It may overstate the gap in imports and exports between the United States and China because some material inputs used to produce Chinese exports do not originate in China.
It shows that there is balanced trade between the United States and China.
The United StatesChina bilateral trade balance may overstate the trade gap if:
Some of the inputs used to produce Chinese exports are imported.
None of the inputs used to produce Chinese exports are imported.
Chinese exports are valued in the United States versus Chinese currency
The United States imposes trade restrictions on Chinese imports.
Value added” in the context of international trade refers to:
The difference between the value of exports and the value of imported inputs used in producing exports
The additional value a worker provides to a firm when she is hired
The value added by being able to purchase goods in a competitive market
The value added by import brokers when they mark up the price of the products
Recent bilateral trade figures alarm politicians who worry about China's growing trade imbalance with the United States. What do the authors of your textbook say?
The real figures are even more shocking
It is not as bad as the numbers appear because China imports a large percentage of the value of its exports to the United States from its other trading partners.
It depends on how you count imports and exports and on which currency is used
Irresponsible governments, corruption, and greedy corporations are responsible for the widening gap.
How has China explained its growing bilateral imbalance with the United States?
Current accounting practices make it very difficult to determine the value added and true national origin of goods.
If the United States would only improve its efficiency, there would be no gap
Most Chinese imports are cheap consumer goods, and no firm in the United States wants to make those things anyway
China continues to struggle with corrupt officials at the customs bureau
How does one determine the “value added” of a product produced and sold domestically
Subtract the total value of imported raw and semifinished materials used in production from the product's total value.
Add the cost of its transportation to its market to the product's total value
Subtract the total value of all raw and semifinished materials used in its production from the product's total value.
Subtract the total value of a country's imports from the total value of its exports
Jane Ferlengeti, a U.S. citizen, purchases a phone for $300 that Apple imported from China. Apple paid its Chinese subsidiary $150 for the phone. How did these transactions change the United StatesChinese bilateral trade balance
It increased by $300.
It worsened by $300.
It worsened by $150
It did not change the United StatesChinese trade balance, since Apple's $150 margin ($300–$150) offset the $150 cost of importing the phone from China.
(Table: Costs Associated with Phone Supply Chain) Jane Smith, a U.S. citizen, purchases a phone from AT&T for $300. By how much did Jane's purchase change the U.S. Trade balance with China?
$300
$150
$120
$30
(Table: Costs Associated with Phone Supply Chain) Jane Smith, a U.S. citizen, purchases a phone from AT & T for $300. By how much did Jane's transaction affect the U.S.Japanese trade balance?
It did not affect it at all.
The U.S.–Japanese trade balance fell by $750.
The U.S.–Japanese trade balance rose by $130.
The U.S.–Japanese trade balance fell by 25%.
Intel, an American company, has manufacturing plants in China that assemble U.S.made components. Suppose one of these plants produces and sells a computer chip to a Chinese computer manufacturer. How is this sale recorded in U.S. International trade statistics?
It is considered to be neither a U.S. Import nor a U.S. export
It is considered to be a U.S. Export to China
It is considered to be a U.S. Import from China
The value of U.S.made chip components is considered to be a U.S. export
Why should the recorded U.S.Chinese bilateral trade deficit in goods be interpreted with some caution?
U.S. Imports of Chinese products may be produced by U.S. Subsidiaries that generate profits for the U.S. Parent firms (recorded as U.S. Service export income).
U.S. Imports of Chinese products may utilize material inputs that China imports from the United States
U.S. Imports of Chinese products may be produced with capital goods (e.g., machinery) that China imports from the United States.
All of these are reasons for a cautious interpretation of the U.S.Chinese bilateral trade balance.
An example of “value added” as an important concept for international trade was the case of imports of iPhones from China. The value added by China was equal to:
The total value of imported raw and semifinished materials into China plus the value of the export to the United States
The total value of the export to the United States minus the total value of imported raw and semifinished materials into China
The total value of the export plus shipping costs
The difference between the total values of exports to the United States minus the total value of imports from the United States
Merchandise trade among European countries accounted for approximately what share of total world merchandise (goods) trade in 2010?
3%
23%
50%
75%
What nations have the world's highest volume of internal trade with one another?
Canada, Mexico, and Japan
Japan, China, South Korea, and Thailand
Nations in the European Union
Middle Eastern countries
Which of the following countries was an original member of the European Union when it was established in 1952?
Poland
Greece
The United Kingdom
Italy
Which of the following economic groupings has the largest volume of trade among its member nations?
NAFTA
The European Union
The TransPacific Partnership
The European FreeTrade Area
U.S. and European merchandise trade accounted for approximately what share of total world merchandise (goods) trade in 2010?
Slightly more than one fourth
Slightly more than one third
About one half
Slightly more than two thirds
NAFTA is:
A free trade area among Mexico, Canada, and the United States
A trade agreement to limit environmentally dangerous imports and exports
A law preventing illegal immigration.
Another name for the European Union.
Which of the following statements about trade is TRUE?
In 2010, Canada was the largest exporter to the United States.
Trade volume among China, Japan, Thailand, and Taiwan is the world's largest
Trade volume among Chile, Brazil, Argentina, and Mexico is the world's largest
The combined trade volume of the United States and the European Union is the world's largest
Which of the following statements explain(s) why Asian countries trade with industrialized countries? I. Workers in Asian countries have low wages. II. Workers are very productive in some Asian countries. III. Asian countries have an abundant supply of raw materials.
I
I, II
1I
I, II, and III
One way to gauge the impact of trade on a nation is to measure:
Wage distortions and job loss.
The ratio of total imports and exports expressed as a percent of a nation's GDP.
Shipping costs
Rises in national income due to trade.
Which of the following is NOT included in the calculation of a country's gross domestic product (GDP)?
The value of all its intermediate goods produced in a year
The value of all its exports produced in a year
The value of all its final consumption goods produced in a year
All of these are included in the calculation of a country's gross domestic product
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