ECON 110 Quiz 8 Economic Growth International Trade solutions complete answers

ECON 110 Quiz 8 Economic Growth International Trade solutions complete answers 

 

Specialization decreases total world output.

 

In order to maximize the potential of workers, managers should

 

Canada has an absolute and a comparative advantage over Scotland in producing natural gas and an absolute advantage over Scotland in salmon production. Scotland can produce both products, but only has a comparative advantage in producing salmon. Because Canada has a comparative advantage in natural gas production, it should

 

Over a given period of time, if exports exceed imports, the result is

 

Crowding in directly limits private investment and can constrain economic growth.

 

Which of the following statements is correct?

 

Economic growth is a(n) _______ process.

 

Real GDP is the most effective measure for determining the

 

Which of the following is definitely true when nominal GDP increases?

 

According to supply-side economists, which of the following encourages economic growth?

 

Over the last decade, the world has experienced

 

World output will be maximized if each country pursues its comparative advantage.

 

Supply-side economists argue ______ the regulation of product markets because regulation _______ economic growth.

 

If a country has a lower opportunity cost in producing a good than its trading partners, then it has

 

When the dollar appreciates, its value compared to other countries’ currencies

 

Which of the following is used to determine the terms of trade?

 

Short-run economic growth focuses on

 

Which of the following countries do not levy taxes on capital gains?

 

An increase in our production possibilities is known as

 

Short-run economic growth comes from

 

Specialization and trade

 

When an economy moves from a point inside its production possibilities curve to a point on the curve, potential GDP has increased.

 

Which groups would support a U.S. tariff on Chinese-produced solar panels?

 

In the long run, research and development is credited with the greatest contributions to economic growth.

 

Government policies to encourage saving are meant to

 

When the U.S. dollar appreciates in value, the United States will export fewer goods, ceteris paribus.

 

Exports are the goods and services bought from foreign sources.

 

Terms of trade refers to

 

Rising employment rates imply falling GDP per capita.

 

Quotas can be a greater threat to competition than tariffs because

 

Growth in GDP per capita can only occur if the growth in

 

If licensing restrictions are used to limit imports, this is an example of a

 

An increase in nominal GDP means that there has been an outward shift of the production possibilities curve.

 

Which group does not benefit from trade when the United States imports baseballs?

 

If the United States has a trade deficit

 

The alternative combinations of goods and services that could be produced with all available resources and technology is the:



The production possibilities curve represents the: 



Which of the following is true if an economy is producing inside its production possibilities curve?



A major goal of short-run macroeconomic policy is to move to a point on the _____ curve. 



By using all available resources and technology the economy will: 



If an economy moves from a point inside the production possibilities curve to a point on the curve:



Long-run macroeconomic policy focuses on shifting the: 



Long-run economic growth policies focus on:



When an economy experiences long-run growth there will be: 



A major goal of long-run economic policy is to: 



Long-run economic growth is consistent with: 



To produce a combination of goods and services beyond the current production possibilities curve, an economy must:



Fiscal and monetary policies are used to shift the: 



A sustained increase in total output is possible only if the aggregate _____ curve shifts to the _____.



Which of the following is definitely true if the production possibilities curve shifts outward? 



Which of the following measures the actual quantity of goods and services produced in the United States?



Real GDP measures the:



Which of the following is the best measure of the actual quantity of goods and services produced by an economy?



Which of the following is the best measure of the growth rate of the economy? 



The growth rate refers to the change in _______ from one period to another. 

 

The change in real output between two time periods divided by total output in the base period is the formula for:



If real GDP was $7,700 billion in 2004 and $8,200 billion in 2005, the economic growth rate was approximately ___ percent.



If real GDP was $600 billion in 2006 and $660 billion in 2007, the economic growth rate was approximately ___ percent.



If real GDP was $750 billion in 2006 and $800 billion in 2007, the economic growth rate was approximately ___ percent.



Which of the following statements about long-run economic growth is true? 



Small differences in annual growth rates accumulate into: 



GDP per capita is:



GDP per capita is the best measurement for determining the: 



GDP per capita is the best measurement for:



The best measurement for comparing the standard of living between two countries is: 



Which of the following is the best measure of living standards for an economy? 



In addition to generating more output, economic growth can also contribute to: 



Growth in GDP per capita is only possible if growth in _______ exceeds growth in _______. 



Which of the following explains why GDP per capita is likely to decline in less developed countries?



If GDP was $7,300 billion in 2006 and the population was 200 million, then GDP per capita was approximately:



If GDP was $7,500 billion in 2007 and the population was 250 million, then GDP per capita was approximately:



If GDP was $8,400 billion in 2005 and the population was 330 million, then GDP per capita was approximately:



If GDP was $7,552 billion in 2006 and the population was 270 million, then GDP per capita was approximately:



If GDP per capita grows at a constant rate of 6 percent per year, using the “rule of 72” it will take approximately ___ years for GDP per capita to double.



If GDP per capita grows at a constant rate of 9 percent per year, using the “rule of 72” it will take approximately ___ years for GDP per capita to double.



If real GDP grows at a constant rate of 2 percent per year, using the “rule of 72” it will take approximately ___ years for real GDP to double.



If real GDP per capita grows at a constant rate of 4 percent per year, using the “rule of 72” it will take approximately ___ years for real GDP to double.



Using the “rule of 72” approximately how long will it take for productivity to double with a constant productivity growth rate of 1.5 percent per year?



All persons over age 16 who are either working for pay or actively seeking paid employment defines:



The proportion of the adult population that is employed is the: 



Output per labor hour is used to measure: 



Which of the following is used to measure labor productivity? 



In recent decades, a primary source of long-run growth in U.S. output has been:



Continual increases in GDP per capita are most likely to come from: 



If the total output for an economy is equal to $750 billion and the total number of labor hours is 20 billion, then labor productivity is equal to:



If the total output for an economy is equal to $840 billion and the total number of labor hours is 24 billion, then labor productivity is equal to:



Which of the following does not contribute to an increase in productivity? 

 

Which of the following is not a source of productivity gain? 



Which of the following is not likely to contribute to gains in productivity? 

 

Sources of productivity growth include all of the following except: 



Improved labor skills contribute to growth of the economy by: 



Productivity is definitely enhanced by: 



Additional capital contributes to economic growth by:



Which of the following will reduce labor productivity? 



More technically advanced capital makes its contribution to productivity by: 



Increases in productivity in the United States since 1929 are mostly due to: 

 

Which of the following is credited with making the greatest contribution to economic growth over time for the United States?



Which of the following has historically made the greatest contribution to U.S. economic growth?



Which of the following policies does not shift the aggregate supply curve to the right? 



Which of the following policies does not shift the aggregate supply curve to the right? 



Government policies that shift aggregate supply to the right include: 



Which of the following can reduce the level of long-run economic growth? 



Dollars spent on education and training:



Government policies that support education and job training cause:



Which of the following government policies will shift aggregate supply to the right? 



Ceteris paribus, when new immigrants enter a country: 



Which of the following is most likely to increase aggregate supply? 



A decrease in the tax rate on capital gains can: 



Increased saving:



A reduction in private-sector borrowing and spending caused by increased government borrowing is known as:



Which of the following can reduce the level of economic growth? 



Crowding out occurs when the government:



Crowding out is most likely to occur when the federal government: 



Which of the following reduces the level of economic growth? 



Which of the following statements is true regarding crowding out?



Supply-side economists believe that:



Which of the following will cause the aggregate supply curve to shift to the left? 



Which of the following does not contribute to economic freedom?



A News Wire article is titled “What Economic Growth Has Done for U.S. Families.” Which of the following changes is likely as a result of economic growth?



One News Wire article is titled “What Economic Growth Has Done for U.S. Families.” Living standards can best be measured using:



One News Wire article, titled “House Poised to Pass STEM Immigration Bill” explains the Senate immigration bill that favors those with certain job skills and education. This type of immigration policy contributes to:



The News Wire article, titled “House Poised to Pass STEM Immigration Bill” explains the Senate immigration bill that favors those with certain job skills and education. This type of immigration policy focuses on:



One News Wire article, titled “House Poised to Pass STEM Immigration Bill” explains the Senate immigration bill that favors those with certain job skills and education. This type of immigration policy should cause:



When an economy moves from a point inside its production possibilities curve to a point on its production possibilities curve, it is using all of its productive capacity.

 

Short-run economic policy attempts to shift the production possibilities curve outward.

 

Long-run economic growth requires an increase in potential GDP.

 

Sustained increases in total output are possible if aggregate supply shifts to the left.

 

Once an economy is on its production possibilities curve, further economic growth requires an expansion of productive capacity.

 

Nominal GDP is the total value of goods and services produced within a nation’s borders measured in current prices.

 

Real GDP, not nominal GDP, is used to measure economic growth.

 

To calculate real GDP for each year, the value of goods and services is measured in the actual prices of each year.

 

GDP per capita is used to measure the standard of living.

 

GDP per capita measures worker productivity.

 

If growth in output exceeds growth in population, then GDP per capita increases.

 

Growth in GDP per capita has allowed Americans to live longer and consume more goods and services.

 

When living standards rise because of an increase in GDP per capita, the amount of leisure time decreases.

 

Productivity can be measured by output per labor hour.

 

Ceteris paribus, if the labor force becomes more educated, then productivity increases.

 

Capital investment is a primary determinant of productivity and growth.

 

When corporate managers reduce investment spending, long-run profitability is likely to increase.

 

There is an inverse relationship between the growth rate of capital and the growth rate of an economy.

 

Improved management has made the greatest contribution to economic growth in the United States.

 

Education, training, and immigration policies have their principal impact on aggregate supply.

 

The size of the labor force and the quality of labor are impacted by immigration policy.

 

Increased capital investment is possible only if saving is reduced or consumption increases.

 

Political and economic stability are important for long-run economic growth.

 

Deregulation shifts the aggregate supply curve to the right by reducing costs and releasing resources for other uses.

 

If a country’s population growth exceeds its GDP growth, then the GDP growth per capita will increase.

 

Sustained economic growth will only occur when the : 



Which of the following would result in a decrease in productivity?



The primary means of achieving long-run economic growth is:



GDP per capita is:



Productivity is a measure of:



Which of the following are sources of increased productivity? 



Policy levers for increasing economic growth rates include increased: 



Economic growth is only possible if the long-run aggregate ______ curve shifts to the ______.



The Dodd-Frank Wall Street Reform and Consumer Protection Act (2010): 

 

_____ GDP is the value of output measured in constant prices or GDP adjusted for inflation.



In 2006, the U.S. savings rate was: 



The minimum wage is an example of:



Which of these is true about regulations imposed on product markets in the United States? 



Goods and services purchased by Americans from foreign sources:

 

Goods and services purchased from foreign sources are known as:

 

Which of the following does the United States import?

 

Imports account for approximately ___ percent of U.S. GDP.

 

Goods and services sold to foreign sources are known as:

 

Which of the following does the United States export?

 

Which of the following does the United States export?

 

Exports account for approximately ___ percent of U.S. GDP.

 

When comparing the ratio of imports or exports to GDP, the United States, relative to other countries, has:

 

Which of the following countries has the highest export ratio?

 

Which of the following countries has the lowest export ratio?

 

Which of the following countries has the lowest export ratio?

 

The trade balance is found by calculating:

 

If a country has a trade deficit, it:

 

The amount by which the value of imports exceeds the value of exports in a given time period is a:

 

The amount by which exports exceed imports is a:

 

A trade surplus occurs when:

 

Which of the following statements about trade is true?

 

Which of the following is not true currently?

 

Which of the following is true?

 

If there are only two countries in the world and one has a trade deficit, the other country must:

 

Which of the following is true about trade?

 

Which of the following is a gain from trade?

 

Which of the following explains why world output is greater as a result of trade?

 

World output of goods and services increases with specialization because:

 

The alternative combinations of goods and services that can be produced in a given time period with the available resources and technology is the:

 

Consumption possibilities refers to the:

 

In the absence of trade, a country’s consumption possibilities are:

 

International trade:

 

If a country specializes in production and trades, its _____ possibilities exceed its _____ possibilities.

 

Assume a country is initially operating on its production possibilities curve. If it specializes in the production of a good and trades, the country will:

 

International trade:

 

Specialization and trade benefits:

 

The most desired goods and services that are given up in order to obtain something else is the:

 

Comparative advantage refers to the:

 

Comparative advantage refers to a country’s:

 

When a country pursues its comparative advantage:

 

If a country pursues its comparative advantage:

 

If a country can produce cars with a lower opportunity cost than its trading partners, then it must have a:

 

If a country can produce rice with a lower opportunity cost than its trading partners, then it must have:

 

If a country has a comparative advantage in the production of paper:

 

If the United States has a comparative advantage in the production of computer software, then:

 

Suppose the United States has a lower opportunity cost in producing corn than Japan, and Japan has a lower opportunity cost in producing motorcycles than the United States, then the United States has:

 

Suppose Chile has a lower opportunity cost in producing salmon than South Korea, and South Korea has a lower opportunity cost in producing cars than Chile, then Chile has:

 

Suppose Brazil has a comparative advantage in coffee production and Mexico has a comparative advantage in tomato production. If these two countries specialize and trade, which of the following is true?

 

Suppose Nigeria has a comparative advantage in oil production and the U.S. has a comparative advantage in soybean production. If these two countries specialize and trade, which of the following is true?

 

If a country has the ability to produce a specific good with fewer resources than other countries, then it has:

 

If a country has an absolute advantage, it has:

 

When Country A can produce a good using fewer absolute inputs than any other country, then Country A:

 

Terms of trade refer to:

 

The terms of trade between two goods depend on:

 

The terms of trade for a specific good will lie between the respective:

 

The terms of trade between two countries should always:

 

A country will only trade if:

 

If the terms of trade are superior to domestic opportunities, then a country is likely to:

 

When the terms of trade are between the opportunity costs for two countries, then both countries benefit if they:

 

As the terms of trade approach the domestic opportunity costs of a product, a country will experience:

 

Which group is most likely to be adversely affected when foreign steel is imported?

 

Which group does not benefit from trade when the United States imports cotton?

 

Which group does not benefit from trade when the U.S. imports leather?

 

As trade restrictions are eliminated, increased imports:

 

Which of the following groups does not have an interest in restricting free trade?

 

Trade restrictions provide:

 

Which of the following is true concerning trade?

 

Which of the following is true if a country specializes in producing the goods for which it has a comparative advantage and then trades?

 

When countries specialize in production and trade, all of the following are true except:

 

Which of the following is not referred to as a barrier to trade?

 

A tax imposed on imported goods is a:

 

Which of the following is the result of a tariff?

 

Tariffs on imported coffee will result in all of the following except:

 

Tariffs on imported sugar will result in:

 

Tariffs tend to reduce the volume of imports because they:

 

The impact of a tariff is to _____ imports and _____ the market price.

 

A tariff on imported goods will cause:

 

A limit on the quantity of a good that may be imported in a given time period is a:

 

A quota limits:

 

A quota limits how far market _____ can shift to the right and causes price to ___.

 

If product standards are used to limit imports, this is an example of a:

 

The exchange rate is the:

 

How expensive an imported good is depends on the foreign price of the good and:

 

When a French tourist traveling in Mexico asks “How many pesos can I get for these euros?” he wants to know the:

 

An increase in the value of one currency relative to another is referred to as:

 

An appreciation of the euro relative to the U.S. dollar will cause:

 

When the U.S. dollar appreciates relative to the Mexican peso:

 

If one currency decreases in value relative to another currency, this is known as:

 

If the U.S. dollar depreciates relative to the Chinese Yuan:

 

Exchange rates are affected by changes in:

 

Which of the following will not cause an increase in the demand for the Euro?

 

The General Agreement on Tariffs and Trade (GATT):

 

The WTO functions as:

 

Based on the information in Table 17.1, the opportunity cost of producing 1 tank in the United States is:

 

Based on the information in Table 17.1, the opportunity cost of producing 1 tank in Russia is:

 

Based on the information in Table 17.1, the opportunity cost of producing 1 automobile in the United States is:

 

The information in Table 17.1 indicates that:

 

Based on the opportunity cost implied in Table 17.1:

 

Based on the information in Table 17.1, the output of automobiles and tanks will increase if:

 

Based on the information in Table 17.2, the opportunity cost of producing 1 bushel of corn in Country B is:

 

Based on the information in Table 17.2, the opportunity cost of producing 1 bushel of corn in Country A is:

 

Based on the information in Table 17.2, the opportunity cost of producing 1 bushel of wheat in Country A is:

 

Based on the information in Table 17.2, it is clear that:

 

Based on the information in Table 17.2, the output of corn and wheat would be greatest if:

 

If the countries are at points A and B in Figure 17.1 and do not trade, what is the total number of motorcycles produced per day?

 

If the countries are at points A and B in Figure 17.1 and do not trade, what is the total number of DVD players produced per day?

 

In Figure 17.1 what is the opportunity cost of a DVD player in Japan?

 

In Figure 17.1 what is the opportunity cost of a motorcycle in Japan?

 

Which of the following best describes the comparative advantage of the two countries illustrated in Figure 17.1?

 

Suppose both countries illustrated in Figure 17.1 specialize completely in the good they produce with the lowest opportunity cost. What is the total production of DVD players?

 

Suppose both countries illustrated in Figure 17.1 specialize completely in the good they produce with the lowest opportunity cost. What is the total production of motorcycles?

 

Refer to Figure 17.2. What does S3 most likely represent?

 

If sugar imports are not restricted in any way in Figure 17.2, the price charged by domestic producers is:

 

The domestic price paid by the nation’s consumers after the imposition of a tariff in Figure 17.2 will be:

 

In Figure 17.2, in the absence of trade, the domestic price and sales of sugar will be determined by the intersection of D and:

 

In Figure 17.2, in the absence of trade, the domestic price of sugar will be:

 

HEADLINE article in the text California grape growers protest mixing foreign wine. The growers are angry at each market percentage point gain of foreign wine in the U.S. wine market, the grape growing industry faces economic ruin. Cheap foreign wine imports are being blended with California wine. The kind of protectionism they are most likely asking for is:

 

A HEADLINE article in the text indicates that the U.S. sugar producers favor a quota on imported sugar. Enforcement of a sugar quota will cause the price of sugar to _____ and quantity to ___.

 

The United States exports goods such as wheat, computers, and lumber.

 

A trade deficit means that imports exceed exports over some relevant time period.

 

The United States is less dependent on foreign trade, as measured by the ratio of exports to GDP, than most other nations.

 

Some U.S. industries are very dependent on sales of goods to other countries.

 

If the United States has a trade deficit with the rest of the world, then the rest of the world must have a trade deficit also.

 

Since one country’s imports are another country’s exports, overall world trade must balance.

 

Specialization and trade means more output throughout the world.

 

The United States buys large quantities of goods and services from other countries, but foreign countries buy very few U.S. goods and services.

 

Since world resources are limited, when two countries trade, one country is better off and the other country is worse off.

 

Countries choose to specialize and trade with one another because the gains from trade are greater than the losses.

 

If every country specializes in what it produces best, more will be produced than if each country tries to produce everything for its own needs.

 

Even with trade a country must continue to consume inside or on its production possibilities curve.

 

Without trade it is impossible for a country to consume a mix of goods and services beyond its production possibilities curve.

 

If the opportunity cost of producing a good is the same in two different countries, there is no incentive to trade.

 

Even if the terms of trade are inferior to domestic opportunity costs, a country will benefit from trade.

 

A quota is a tax on specific goods.

 

The exchange rate is the ratio at which a currency can be exchanged for gold.

 

Total U.S. consumption possibilities will increase if the United States:



U.S. exports:



Because trade increases a nation’s consumption possibilities, it is clear that:



A tariff ____ the domestic price of a good and _____ the quantity sold.



A country will not trade unless:



The United States typically has a merchandise ____ and a service ______. 



The ability of a country to produce a good with fewer resources than another country is called:



If the value of a nation’s currency decreases, its exports become ____ and the goods it imports become ______.



A limit on the quantity of a good that may be imported is called a(n):



The organization that is in charge of policing world trade and resolving trade disputes today is called the :



Import restrictions make domestic consumers _____ off, foreign producers _____ off, and domestic producers _____ off.