ch01 1-1 Copyright 2010 John Wiley Sons, Inc.

(ch01(25)) 1-1Copyright © 2010 John Wiley & Sons, Inc.File: Ch01; Chapter 1: Introduction Multiple Choice

• Which of the following products are not produced at all in the United States?

a.Coffee, tea, cocoa b.steel, copper, aluminum c.petroleum, coal, natural gas d.typewriters, computers, airplanes

Ans: a

Level: Easy

Heading: The Globalization of the World Economy

2. International trade is most important to the standard of living of:

a.the United States b.Switzerland c.Germany d.England

Ans: b

Level: Easy

Heading: International Trade and a Nation’s Standard of Living

3. Over time, the economic interdependence of nations has:

a.grown b.diminished c.remained unchanged d.cannot say

Ans: a

Level: Easy

Heading: International Trade and a Nation’s Standard of Living

• A rough measure of the degree of economic interdependence of a nation is given by:

International Economics 10e Dominick Salvatore (Test Bank All Chapters, 100% Original Verified, A+ Grade) 1 / 4

Salvatore’s International Economics – 10 th Edition Test Bank (ch01(25)) 1-2Copyright © 2010 John Wiley & Sons, Inc.a.the size of the nations' population b.the percentage of its population to its GDP c.the percentage of a nation's imports and exports to its GDP d.all of the above

Ans: c

Level: Easy

Heading: International Trade and a Nation’s Standard of Living

5. Economic interdependence is greater for:

a.small nations b.large nations c.developed nations d.developing nations

Ans: a

Level: Easy

Heading: International Trade and a Nation’s Standard of Living

• The gravity model of international trade predicts that trade between two nations is larger

a.the larger the two nations b.the closer the nations c.the more open are the two nations d.all of the above

Ans: d

Level: Medium

Heading: The International Flow of Goods, Services, Labor and Capital

7. International economics deals with:

a.the flow of goods, services, and payments among nations b.policies directed at regulating the flow of goods, services, and payments c.the effects of policies on the welfare of the nation d.all of the above

Ans: d

Level: Easy

Heading: International Economic Theories and Policies 2 / 4

Salvatore’s International Economics – 10 th Edition Test Bank

(ch01(25)) 1-3 Copyright © 2010 John Wiley & Sons, Inc.

8. International trade theory refers to:

• the microeconomic aspects of international trade
• the macroeconomic aspects of international trade
• open economy macroeconomics or international finance
• all of the above

Ans: a

Level: Easy

Heading: International Economic Theories and Policies

• Which of the following is not the subject matter of international finance?
• foreign exchange markets
• the balance of payments
• the basis and the gains from trade
• policies to adjust balance of payments disequilibria

Ans: c

Level: Easy

Heading: International Economic Theories and Policies

10. Economic theory:

• seeks to explain economic events
• seeks to predict economic events
• abstracts from the many detail that surrounds an economic event
• all of the above

Ans: d

Level: Medium

Heading: International Economic Theories and Policies

• Which of the following is not an assumption generally made in the study of international

economics?

• two nations
• two commodities
• perfect international mobility of factors
• two factors of production

Ans: c

Level: Medium 3 / 4

Salvatore’s International Economics – 10 th Edition Test Bank

(ch01(25)) 1-4 Copyright © 2010 John Wiley & Sons, Inc.

Heading: International Economic Theories and Policies

12. In the study of international economics:

• international trade policies are examined before the bases for trade
• adjustment policies are discussed before the balance of payments
• the case of many nations is discussed before the two-nations case
• none of the above

Ans: d

Level: Medium

Heading: International Economic Theories and Policies

• International trade is similar to interregional trade in that both must overcome:
• distance and space
• trade restrictions
• differences in currencies
• differences in monetary systems

Ans: a

Level: Easy

Heading: International Economic Theories and Policies

• The opening or expansion of international trade usually affects all members of society:
• positively
• negatively
• most positively but some negatively
• most negatively but some positively

Ans: c

Level: Easy

Heading: International Economic Theories and Policies

15. An increase in the dollar price of a foreign currency usually:

• benefit U.S. importers
• benefits U.S. exporters
• benefit both U.S. importers and U.S. exporters
• harms both U.S. importers and U.S. exporters
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