International Econ: Chapter#6

Front 1

The European union is primarily intended to permit

Back 1

Free movement of resources and products among member nations

Front 2

Which of the following represents the stage where economic integration is leastcomplete

Back 2

Free trade area

Front 3

Customs union theory reasons that the formationof a customs union will decrease members real welfare when the

Back 3

Trade diversioneffect exceeds the trade creation effect

Front 4

Which economic integration scheme is solely intended to abolish trade restrictions among member countries while setting up common tariffs against nonmembers

Back 4

Customs union

Front 5

Assume that te formation of a customs union turns out to include the lowest-cost world producerof the product in question. Which effect could not occur for the participating countries

Back 5

Trade diversion

Front 6

Which organization of nations permits free trade among it's members in industrial goods while each member maintainsfreedon in it's trade policies toward non-member countries

Back 6

North American free trade association

Front 7

Whichfoem of economic integration occurs when participating countries abolish tariffs on trade among themselves, establish a common tariff on imports from nonmembers, and permit a free movement of capital and labor within the organization

Back 7

Common market

Front 8

A static welfare effect effect resulting from the formation of the European union would be

Back 8

Trade diversion

Front 9

A dynamic welfare gain resulting fromthe formation o the euro union would be

Back 9

Economies of scale

Front 10

Which organization was founded in 1957 whose objective was to create an economic union among it's members

Back 10

European union

Front 11

Which nation is not a Mende of the north American free trade association

Back 11

Greenland

Front 12

The European union has achieved all of the following except

Back 12

Adopted a common fiscal policy for member nations

Front 13

Which country isnot a member of the European union

Back 13

Iceland

Front 14

The implementation o the European union has

Back 14

Made it harder for Americans to competeagainst the Germans in the British market

Front 15

The common agricultural policy of the European union has

Back 15

Decreased American farm exports to the EU

Front 16

Consider 8.1 with free trade, Greece imports

Back 16

5 calculators from germany

Front 17

Consider figure 8.1 assume Greece levies a per-unit tariff of $20 on imports from both Germany and france

Back 17

1 calculator from germany

Front 18

Referring to figure 8.1 suppose Greece forms a customs union with France. Greece will import

Back 18

3 calculators at a per unit price of $30

Front 19

Suppose that steel from japan faces a 20 percent tariff in France and a 25 percent tariff in Italy, while France and Italy maintain free trade between each other France and Italy are therefore part of an

Back 19

Free trade area

Front 20

Suppose that mexicoand Canada form a free trade area, mexicans then decrease auto mfg and increase imports o autos from Canada while the canadiens decrease computer production and import more computers from Mexico. This is an example of:

Back 20

Trade creation

Front 21

Suppose that the united kingdom and Italy abolish all tariffs on each others goals and all restrictions on movements of factors of productionbetween them. They Lao implement a common protectionist policy toward other countries. Thi is an example of an:

Back 21

Common market

Front 22

In the united states, which group was most likely to be hurt by the North American Free Trade Agreement?

Back 22

unskilled labor

Front 23

The failure of the centrally-planned economies was exemplified by all of the following except:

Back 23

interest rates that were below free-market levels

Front 24

The transition of the former communist countries to market economies requires:

Back 24

Privatization of public property

Front 25

In the former Soviet Union, major manufacturing firms were typically

Back 25

Owned and operated by the government

Front 26

The former communist countries included all of the following except:

Back 26

Austria

Front 27

The economic reforms of the early 1990s that occurred in the former Soviet Union and Eastern Europe resulted in:

Back 27

A movement from centrally-planned economies toward market economies

Front 28

Suppose that Canada has domestic firms that could supply its entire market for radios at a price of $50, while U.S. firms could supply radios at $40 and Mexico at $30. Suppose that Canada initially has a 50 percent tariff on imports of radios and then forms a free trade area with the United States. As a result, Canada realizes:

Back 28

Trade diversion, trade creation, and potential overall welfare gains

Front 29

As of 2002, members of the European Monetary Union agreed to replace their currencies with the:

Back 29

euro

Front 30

The formation of the European Monetary Union is expected to entail benefits for member countries which include all of the following except:

Back 30

Independent monetary policies run by the central bank of each member country

Front 31

A main disadvantage of the European Monetary Union is that:

Back 31

Each member country loses the use of monetary policy as to tool to combat recession

Front 32

A common market

Back 32

Allows the imposition of common external trade barriers against non-members

Front 33

On the balance-of-payments statements, merchandise imports are classified in the:

Back 33

Current account

Front 34

Which of the following is considered a capital inflow?

Back 34

A sale of U.S. financial assets to a foreign buyer

Front 35

Which of the following is classified as a credit in the U.S. balance of payments?

Back 35

U.S. exports

Front 36

Which of the following indicates the international investment position of a country at a given moment in time?

Back 36

The balance of international indebtedness

Front 37

Concerning the U.S. balance of payments, which account is defined in essentially the same way as the net export of goods and services, which comprises part of the country's gross domestic product?

Back 37

Goods and services account

Front 38

If the United States government sells military hardware to Saudi Arabia, the transaction would be recorded on the U.S. balance of payments as a:

Back 38

Current account credit

Front 39

The current account of the U.S. balance of payments does not include:

Back 39

The sale of securities to foreigners

Front 40

The value to American residents of income earned from overseas investments shows up in which account in the U.S. balance of payments?

Back 40

Current account

Front 41

Consider Table 10.2. The U.S. balance of international indebtedness suggests that the United States is a net:

Back 41

Creditor

Front 42

For the first time since World War I, in 1985 the United States became a net international:

Back 42

Debtor

Front 43

A country that is a net international debtor initially experiences:

Back 43

An augmented savings pool available to finance domestic spending

Front 44

Credit (+) items in the balance of payments correspond to anything that:

Back 44

Involves receipts from foreigners

Front 45

Debt (-) items in the balance of payments correspond to anything that:

Back 45

Involves payments to foreigners

Front 46

When all of the debit or credit items in the balance of payments are combined:

Back 46

The total surplus or deficit equals zero

Front 47

In the balance of payments, the statistical discrepancy is used to:

Back 47

Ensure that the sum of all debits matches the sum of all credits

Front 48

The role of ____ is to direct one nation's savings into another nation's investments:

Back 48

Capital flows

Front 49

When a country realizes a deficit on its current account:

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It becomes a net demander of funds from other countries

Front 50

Reducing a current account deficit requires a country to:

Back 50

Increase private saving relative to investment

Front 51

Reducing a current account surplus requires a country to:

Back 51

Increase the government's deficit and increase private investment relative to saving

Front 52

The burden of a current account deficit would be the least if a nation uses what it borrows to finance:

Back 52

Investment on plant and equipment

Front 53

Economic integration is the process of eliminating restrictions on international trade, payments, and factor mobility.

Back 53

True

Front 54

When a group of countries establish a free-trade area, they achieve the highest stage of economic integration.

Back 54

False

Front 55

Trade creation and trade diversion refer to the short run (static) effects of economic integration while economies of scale, stimulus to investment, and effects on competition refer to the long run (dynamic) effects.

Back 55

true

Front 56

Referring to the balance-of-payments statement, an international transaction refers to the exchange of goods, services, and assets between residents of one country and those abroad.

Back 56

true

Front 57

The balance of payments includes international transactions of households and businesses, but not government.

Back 57

false

Front 58

Because the balance of payments utilizes double-entry accounting, merchandise exports will always be in balance with merchandise imports.

Back 58

false

Front 59

The "goods and services" account of the balance of payments shows the monetary value of international flows associated with transactions in goods, services, and unilateral transfers.

Back 59

false

Front 60

A positive balance on the goods-and-services account of the balance of payments indicates an excess of exports over imports which must be added to the nation's gross domestic product.

Back 60

true