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Indicate whether the statement is true or false.

• Open economies have less firm turnover due to more stable markets.
• True
• False

• The “Made in America” emblem printed on televisions sold by Element Electronics is intended to inform consumers of

its commitment to create quality manufacturing jobs in the United States.

• True
• False

• Although free trade provides benefits for consumers, it is often argued that import protection should be provided to

domestic producers of strategic goods and materials vital to the nation's security.

• True
• False

• A firm needs to reduce its production costs. One alternative to moving the production overseas where labor costs are

generally lower is to move production to the southern United States where nonunionized workers are more plentiful.

• True
• False

• Workers sometimes face demands for wage reductions from their employers, which threaten to export jobs abroad if

wage reductions are not accepted.

• True
• False

• Higher costs of transportation and communication, and higher trade barriers, have contributed to increased

globalization in recent decades.

• True
• False

• Increased foreign competition tends to increase profits of domestic import-competing companies.
• True
• False

• The "openness ratio" of the U.S. economy in 2015 was approximately 15 percent, the same as in 1890.
• True
• False

• The advent of foreign competition forced Kodak Inc. to go into bankruptcy and to cease operating as a producer of

cameras and film.

• True
• False

• In an open trading system, a country will import those commodities that it produces at relatively low cost while

exporting commodities that can be produced at relatively high cost.

• True

(International Economics, 17e Robert Carbaugh) (Test Bank, Answer at the end of each Chapters) 1 / 4

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• False

• Critics maintain that U.S. trade policies have mainly benefitted large corporations rather than the average American

citizen.

• True
• False

• Compared to the 1800s, the "openness ratio" of the U.S. economy had declined by the 2000s.
• True
• False

• As measured by the value of trade, Canada, Mexico, and China are the three top trading partners of the United States.
• True
• False

• In the long run, competitiveness depends on an industry's natural resources, its stock of machinery and equipment, and

the skill of its workers in creating goods that people want to buy.

• True
• False

• The term "economic interdependence" implies that the wealth and success of one country impacts the wealth and

success of another country.

• True
• False

• The most profound influence driving globalization is an increased awareness of global human rights.
• True
• False

• The benefits of international trade accrue in the forms of lower domestic prices, development of more efficient

methods and new products, and a greater range of consumption choices.

• True
• False

• If a nation has an open economy, it means that the nation allows private ownership of capital.
• True
• False

• In the United States, tariffs and quotas are commonly used as tools designed to restrict trade among the fifty states.
• True
• False

• The development of diesel engines and gas turbines helped reduce transportation costs and thus increase international

trade among nations.

• True
• False

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• In the late 1990s, Schwinn Inc. closed all of its bicycle manufacturing plants in China and moved them to the United

States.

• True
• False

Indicate the answer choice that best completes the statement or answers the question.

• Today, most Schwinn bicycles are manufactured in
• China.
• Canada.
• Mexico.
• Germany.

• Element Electronics decided to locate TV production in America instead of abroad. What influenced this decision?
• Element Electronics wanted to capitalize off the successful television manufacturing industry in the U.S.
• Element Electronics wanted to create quality manufacturing jobs in the U.S.
• Element Electronics wanted to cut back on labor costs by locating their factory in Detroit.
• Element Electronics wanted to reduce the number of television parts they imported.

• The largest amount of trade with the United States in recent years has been conducted with
• China.
• Germany.
• Canada.
• the United Kingdom.

• How has technology impacted the globalization of economic activity?
• Technological innovation has led to decreased mechanization of economic activities.
• Technological innovation and invention have increased productivity.
• The rise of the Internet has increased communication costs in the service industry.
• Technology has led to a greater separation between people and enterprises.

• Which statement is true about import restrictions?
• They decrease the volume of exports.
• They lead to more jobs for domestic workers.
• They decrease imports and increase exports.
• They are more conducive to prosperity than free trade.

• In response to the Great Recession of 2007–2009, the Federal Reserve (Fed) attempted to grow the U.S. economy with

a policy called quantitative easing, which would pump more dollars into the economy and cause interest rates to fall.Which of the following was NOT a criticism of the policy?

• The policy could lead to a depreciation in the dollar's exchange value.
• The policy could improve American competitiveness at other nations' expense.
• The rest of the world's producers could see their exports begin to fall.
• Americans goods would become more expensive for foreign consumers.
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• The United States was less open to international trade between
• 1890 and 1910.
• 1930 and 1950.
• 1890 and 1950.
• 1950 and 2013.

• A sudden shift from import tariffs to free trade may induce short-term unemployment in
• import-competing industries.
• industries that are only exporters.
• industries that sell domestically as well as export.
• industries that neither import nor export.

• The natural gas turbine is considered a driver of globalization because the turbine
• increases efficiency, moving goods from place to place.
• was developed in the United States.
• is associated with increased transportation costs.
• increases the labor input and decreases unemployment.

• According to human rights activists, which organization supports governments that permit sweatshops?
• The International Organization for Standardization
• The International Monetary Fund
• The World Health Organization
• The World Trade Organization

• Following World War II, the U.S.
• became less open.
• focused on technological advancements in industry.
• negotiated increases in trade barriers.
• went through a period of economic isolationism.

• Which of the following is a fallacy of international trade?
• Trade is a zero-sum activity.
• Exports increase employment in exporting industries.
• Import restrictions increase employment in import-competing industries.
• Tariffs and quotas reduce trade.

• As an economy opens up to international trade, domestic prices
• decrease.
• increase.
• become stable over time.
• align more with international prices.

• The phrase “When the United States sneezes, the economies of other nations catch a cold” was first used to describe

the impact of the economy of the United States on the rest of the world at the end of World War II. This phrase is now

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